Fall In Agricultural Productivity For Second Year In A Row

Total factor productivity (TFP) in agriculture is estimated to have fallen marginally by 0.1% between 2012 and 2013. There was an increase of 0.5% in the volume of outputs compared with 2012 but a larger increase of 0.7% in inputs. It is second year in a row that TFP has fallen.

Final output by volume at market prices increased by 0.5%. The increase was offset by a 0.7% increase in the volume of all outputs and entrepreneurial labour used in the process.

Long term trends show that total factor productivity increased by 20% between 1988 and 2013 largely due to the volume of outputs remaining the same while the volume of inputs and entrepreneurial labour fell by 18%. TFP was basically unchanged during the mid-80s to mid-90s, it grew by 18% between 1997 and 2005 and has remained unchanged since then with year to year variations.

Total factor productivity is a key measure of the economic performance of the agricultural industry as it measures the efficiency of the industry at turning inputs into outputs.

Biggest Fall In Agricultural Productivity Since 1985

Total factor productivity figures from Defra suggest that the agricultural industry has seen a fall of 2.9% between 2011 and 2012 giving the lowest level since 2007 and it is the biggest single year fall since 1985. The poor levels of productivity reflect the poor weather conditions according to Defra.

The picture can be looked at over the longer period. Between 1986 and 2012 the volume of final output has remained fairly stable and the volume of all inputs and entrepreneurial labour has fallen by 19%. Looking at it that way total factor productivity has increased by 21%. This is he first Defra release to use 2010 as the base year for total factor productivity.

Agricultural Total Factor Productivity Lowest Since 2004

Total factor productivity in the agricultural industry has fallen by 3.2% between 2011 and 2012 to its lowest since 2004. It is the largest single year fall since 1985. The poor weather conditions in 2012 are said to be responsible. Looking at the longer period the output of the industry has remained more or less unchanged between 1986 and 2012 while the inputs and entrepreneurial labour fell by 19%. This had the effect of increasing productivity by 20%.

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.

Farm Incomes Show Slight Increase In 2010

The provisional estimates of the total income from farming for 2010 and previous years published by Defra and ONS show that TIFF per annual work unit (AWU) of entrepreneurial labour fell in 2010 by 3.4% in real terms to £23,953. Total Income from Farming increased marginally by £3.7m to £4.38bn and in real terms with adjustments for inflation fell by £198.4m.

Total factor productivity for the agricultural industry in the UK has increased by 49% since 1973. During that time the volume of the final output has risen by 25% while inputs have fallen by 16%.