Developments in new farm typology

Background EC Farm Structure Survey in 2010 (full) and 2013 and 2016 (partial). Previously 2000 (full) and partial surveys in 2003, 2005 and 2007 Two major developments for FSS 2010: FSS 2010 – a new typology is being implemented FSS 2010 – a new system of valuing commodities on each holding, i.e., changing from SGM (Standard Gross Margins) to SO (Standard Outputs). All Member States are implementing these changes Scottish Government working with the rest of the UK in progressing these changes. FSS 2010 ‘suite’ will be populated using SAF/June census, and a stand alone survey on agricultural production methods (SAPM). Some administrative data will also be used (UK organics data).

What is farm ‘typology’? A system for creating consistent farm types across the EC. Farmers do not self-report their farm type, they report their commodities (areas and units) and we calculate what farm type this falls into. A consistent methodology in use which allows comparison across Member States. Effects Farm Accounts Survey (FADN), FSS, June. Also – farm type is used as a key strata for drawing samples and producing TIFF estimates. Is is also used for producing regional and National Accounts data along with various policy interests in reporting statistics by farm type.

How does it work? Collect data on commodities at farm (holding) level Calculate standard multipliers (coefficients) for ‘a unit’ of each commodity (e.g., 1 hectare of wheat, 1 dairy cow etc.). For each holding, multiply and sum all of these commodities together to produce an output ‘worth’ for each holding. FSS top-level categories, 18 medium categories and 55 low-level categories. Apply the EC typology to each holding. This allocates each holding into a particular farm type based on the relative weight/contribution of the commodities to the total output worth. The EC provide the ‘rules’ that are used to allocate holdings to a particular farm type. Allocation route is based on thresholds within the ‘commodity mix’.

Worked example 1.36 Ha pasture & £ = £ £ = £2, Total standard output (SO) = £2, Holding has GL present (Grazing Livestock) = £2, …therefore FCP1 (forage for sale) = 0 …meaning FCP4 (forage for grazing livestock) = £ Typology P4 (grazing livestock and forage) > 2/3 total SO = yes [high code 4) Doesn’t meet criteria for dairying, cattle rearing/fattening therefore is coded as: - sheep goats and other grazing livestock [medium code 48] - various grazing livestock [low code 484]

Coefficients - SGM vs SO SGM was calculated as [output value + subsidy – input costs] 2005 – introduction of Single Farm Payment meant that negative SGMs were possible. Standard Output introduced to counter this. Based wholly on output value. Test series submitted to EC in December Was 2004 centred (3 years). Subsidy data for 2005 was rolled forward from FSS 2010 will need SO for 2007 centred on 5 years. Calculated in early 2010.

SGM versus SO Standard Gross Margin Wheat (non-LFA) = £708 Primary product Yield * price = value of £645 ADD By-product & compensatory payment = £365 EQUALS output worth of £1,010 MINUS Input costs of £302 EQUALS STANDARD GROSS MARGIN of £708 Standard Output Wheat (no LFA designation) = £775 Primary product Yield * price = value of £645 ADD By-product of £130 No adjustment for compensatory payment or input costs EQUALS STANDARD OUTPUT of £775

Effect of new typology - 1

Effect of new typology - 2

Summary of changes Currently, holdings with grazing and no livestock are counted as mixed livestock (ID = 4440). FSS2010 – these will be counted as general cropping (ID = 16summat). Effects around 4,500 holdings. Removal of LFA coefficients – local solution will be implemented. Fodder crops / rough grazing etc currently allocated a value of £1 per hectare – FSS2010 this area is now specifically valued, based on input costs. This causes shifts in the farm type of some holdings.