Total Farm Incomes Up 13%

Defra released the first estimates of total income from farming (TIFF) recently and it is reported to have risen by £708m or 13% in real terms between 2012 and 2013 to £5,464m. In terms of annual work units (AWU) of entrepreneurial labour the increase was 15% in real terms to £28,426 in 2013. The difference is due to a decline in the numbers of farmers and other unpaid workers.

Key contributors to the increase were milk by £505m, potatoes by £210m, and barley by £199m. The increases were offset by a decrease in value of oilseeds of £245m and an increase in the cost of animal feed of £740m.

Agriculture's contribution to GDP measures as gross value added at basic price increased by 7% or £604m to £9,222m. Intermediate consumption increased by £892m to £16,492m mainly due to an increase in the price of animal feed an additional increase in the value of seed. There was a reduction in the number of employees but a small increase in pay of £23m to compensate. The total compensation of employees in 2013 was £2,379m.

Compared to 1994 total income from farming per AWU of entrepreneurial labour has increased by 10% compared to a 15% fall in total income from farming.

Farm Incomes Down By 13%

Defra released the second estimate of the total income from farming (TIFF) statistics for 2012 recently and the figures suggest that farm incomes fell by 13% (£721m) between 2011 and 2012 to £4,810m (real terms after allowing for inflation). RPI inflation increased by 3.2% during 2012.

Two main factors were given for the fall in total income and they were the weather and the resulting increased cost values; and a fall in the value of direct payments to farmers due to adverse changes in the Pound/Euro exchange rate. Poor weather affected the volume and quality of the harvest and increased the value of inputs used.

The income of farmers per annual work unit (AWU) was estimated to have fallen by 14% in real terms to £24,570 in 2012.

Gross output at basic prices at November 2013 was £24,089m and total intermediate consumption was £15,464m. There was a small decrease in Gross Value Added (GVA) of £51m to £8,625m because the increase in the value of intermediate consumption (goods and services used in production) was greater that the increase in the value of output.

Longer term trends show that total income from farming has remained at a higher level than the late 1990s and early 2000s but below a peak in the mid-1990s. Entrepreneurial labour income has performed better than TIFF mainly due to a decrease in the number of farmers and other unpaid workers.

British Food Industry More Competitive In Future

Total factor productivity (TFP) of the UK food chain grew by 0.7% in 2011 and has continued to grow since 2002 making Britain's food industry more competitive. The food sector plays an important part in the economy accounting for 7% of Gross Value Added.

The food chain is made up of four parts: food retail, food manufacture, food wholesale and non-residential food catering. TFP measures the efficiency with which inputs are transformed into outputs. Productivity in both food manufacture and food wholesale has risen since 2000 while food retail and catering are much the same as 2000.

Average annual growth in the food chain between 2002 and 2011 rose by 0.7% as compared to an increase of 0.2% in the wider economy.

Second Quarter Business Investment 20.1%

Business investment remained almost the same during the second quarter of 2012 according to data from Eurostat. The gross investment rate of non-financial corporations in Q2 was 20.1% in the EU27 compared with 19.9% in Q1 2012. In the euro area the investment rate was 20.3% in Q2 2012 compared with 20.2% in Q1. Investment increased at 0.8%, a greater rate than value added which increased at 0.4%. Stocks fell for the third quarter in a row. The gross profit share of non-financial corporations in the EU27 was 37.7% compared with 37.9% in Q1. Inthe euro area the rate remained stable at 38.1% because value added increased at 0.4% the same rate as pay.

Farming Incomes Increase By Over £1.3m

Total income from farming for 2011 was estimated to have reached £5,693m compared with 2010, an increase of £1,352m or 25%. The return per annual work unit of entrepreneurial labour is estimated to have been £30,900 in real terms, an increase of 24%. Looking at the longer term, 2011 represents the best performance of the UK agricultural industry since the mid-1990s. Gross value added at basic prices increased by £1,748m to £8,845m which more than offset the increase in intermediate consumption which rose by £1,321m to £14,806m.

Annual Business Survey 2009

Provisional results for the annual business inquiry now called the annual business survey show decreases in all four main industry groups: production, construction, distribution and services in turnover, purchases and gross value added (GVA) at basic prices. Agriculture also reported decreases in turnover, purchases and GVA at basic prices.

Production decreased 8.1% in turnover, 8.9% in purchases and 10.2% in GVA. Within the production group mining and quarrying fell by 24.6% in turnover and 37.5% in GVA. Production did report some increases most notably in electricity, gas, steam and air conditioning with 8.4% in turnover and 32.1% in GVA. Manufacturing reported decreases of 9.1% in turnover, 10.9% in purchases and 11.2% in GVA. The construction industries reported the largest percentage falls with -13.7% in turnover, -15.1% in purchases and -20.3% in GVA.

Distribution reported the largest decreases in money terms with a decrease of £60bn in turnover (-4.9%), £58bn (-5.5%) in purchases and £17bn (-4.6%) in GVA. While the financial differences were the largest the percentage changes were not. Only services had a smaller percentage change. The only increases in the distribution industries was in retail (except motor vehicles and motorcycles) increasing turnover by 0.3% and GVA by 1.8%.