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[Interactive map] Agricultural income1 :
The large gap between European countries in 2015



Arnaud Carpon, Terre-net Média


Article published in Terre-net Média



In 2015, farmers in countries the most exposed to market volatility saw their incomes fall sharply.

According to first estimates from Eurostat, the centre for European statistics, real agricultural income in Europe declined by 6% in 2015 compared to 2014, whilst the agricultural workforce fell by 1.8 %. Consequently, real agricultural income per worker in the EU decreased by 4.3%. “Among EU Member States, real agricultural income per worker in 2015 was expected to rise in thirteen Member States and fall in fifteen compared to the previous year, in varying proportions however”, Eurostat explains.

With the announcement contested by the French Ministry of Agriculture of a forecast for a strong increase in French farm incomes, France would be by far the best placed in terms of income prospects for 2015 among major producing countries.


Germany plummets

“Compared to the previous year, the largest increases in real agricultural income per worker was expected in Croatia (+ 21.5%), Latvia (+ 14.3%), Greece (+ 12.1%) , France (+ 8.8%) and Italy (+ 8.7%), and the largest decreases in Germany (- 37.6%), Poland (- 23.8%), Luxembourg (- 20%), Denmark (- 19.7%), the UK (- 19.3%) and Romania (- 19.2%)”, says Eurostat.

“Between 2010 and 2015, estimates show that real agricultural income per worker fell in the EU by 5.7%, with the highest falls in value for sugar beet, grain maize and milk”.

“Compared to 2014, the value of agricultural production at producer prices in 2015 was expected to decline in the EU by 2.5% in nominal terms, mainly due to the fall in the value of livestock production (- 5 9%) and a slight decline in the value of crop production (- 0.3%), combined with lower input costs (- 2.4%).

The decline in the value of livestock production is mainly the consequence of the reduction in the value of milk (- 14.9%) and pig stocks (- 8.9%), partially offset by the increase in the value of cattle (+ 4.3%), sheep & goats (+ 3.2%), eggs (+ 2.1%) and poultry (+ 1.1%).

In the EU, the cost of agricultural inputs (intermediate consumption) in 2015 was expected to decline by 2.4%, mainly due to significant reductions in energy costs and lubricants (- 0.1%), as well as animal feed (- 3.7%). Lower prices for feed as inputs are reflected in the decline in the producer prices of several grain types.


The boom in farm incomes in the CEEC

Over the last decade, the evolution of agricultural income (annual real income of factors of production per unit of labour*) was lower in France than in all 28 countries of the European Union.

But the very favourable average trend of farm incomes in the EU at 28 is mainly due to the boom in CEEC incomes, the Central and Eastern Europe Countries which recently joined the Union. Since 2005, revenues have increased by 100% or more in Bulgaria and Romania, the two countries that joined the EU in 2007. The same applies to Poland or Hungary, which joined the EU in 2004.

European figures also measure the income volatility faced by farmers. In France, farm income volatility remains modest compared to that of our principal neighbours. Using 2005 as a reference, farm income* in France fluctuated between - 11.1% to + 32.2%. This is a lot, but little compared to the income volatility of our European competitors with a more liberal and more export-oriented economy than ours.

Still using 2005 as a reference, the difference in agricultural income in Denmark was between - 35% to + 79.6%! In Germany, the difference ranged from + 4.3% to + 73.3%. Note also that this increased volatility in income in the other European countries benefitted their farmers, because 2005 rising incomes were higher than in France.

Finally, remember that these figures, based on first estimates provided by the Member States are provisional. In March 2016, Eurostat will publish a revised second set of estimates.

*Agricultural income is the net value added to the cost of factors of agricultural activity, which is calculated by subtracting from the value of agricultural production: the value of intermediate consumption, the consumption of fixed capital and production taxes; and by adding production subsidies. It comprises the income generated by agricultural activities (and inseparable non-agricultural, secondary activities) over a given accounting period (i.e. the calendar year 2015), although in some cases, corresponding revenues are perceived only later. It is therefore not income actually received during the year.


1 See the interactive map at Terre-net by following this link:
http://www.terre-net.fr/actualite-agricole/economie-social/article/le-grand-ecart-entre-pays-europeens-202-115681.html


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Paris, 14 December 2018