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Agriculture: income declines as production value rises.

Real agricultural income fell by 3.5% in the EU in 2008 - after increasing by 9.3% in 2007 - while the value of agricultural output at basic prices rose by 3.9%, according to estimates published, on 2 April, by Eurostat.

INCOME

The decline in real agricultural income per worker was the result of a fall in real agricultural income (-5.7%) and a reduction in agricultural labour input (-2.3%). The decrease in real agricultural income was itself the result of: an increase in the value of agricultural output at basic prices in real terms (+3.9%), a steep rise in input costs in real terms (+10.3%); unchanged subsidies net of taxes in real terms (0%); and an increase in depreciation in real terms (+2.5%).

In 2008, real agricultural income per worker rose in eight member states and fell in nineteen. The largest increases were observed in Bulgaria (+28.9%), Romania (+28.4%), Hungary (+18.6%) and the United Kingdom (+16.5%), and the largest decreases in Denmark (-24.7%), Estonia (-23%), Belgium (-22.6%), Latvia (-19.4%) and Poland (-17.7%).

Between 2000 and 2008, EU27 real income per worker is estimated to have increased by 15.2%. In the 12 new member states the rise was 74.7%, while in the EU15 real income per worker remained virtually unchanged (-0.2%). On average, agricultural labour input in the EU27 has fallen by 23.2% since 2000, and by 29.7% in the new member states.

PRODUCTION

According to Eurostat, the rise in the value of agricultural production in basic prices was due principally to growth in the value of crop production (+2.9%) and animal production (+5.5%) in real terms.

The rise in the value of crop production in 2008 was due to a growth in output volume (+6.9%), which was only partly offset by a fall in producer prices (-3.6%). Output volumes of the three largest crop products rose: cereals (+22.3%), fruits (+2.5%) and fresh vegetables (+1.8%). The sharpest increase in crop prices was recorded for oil seeds (+11.9%). On the other hand, prices for cereals (-12%) and potatoes (-9.3%) fell significantly.

The increase in the value of animal output in 2008 was mostly due to a rise in producer prices (+5.6%), while output volume (+0.1%) remained nearly stable. The growth in the real value of milk production was driven by a rise in prices (+6.5%), while volume grew only slightly (+0.7%). The increase in the price of pigs (+9.1%) was only partly offset by a fall in volume (-1.6%). In the case of cattle, producer prices (+4%) rose, while production volume (+0.2%) was almost stable.

EU27 agricultural input costs (intermediate consumption) grew by 10.3%, mainly owing to sharp increases in prices for fertilisers (+42.8%), energy (12.2%) and feeding stuff (+9.7%).

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Article Details
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Publication:European Report
Article Type:Financial report
Geographic Code:4E
Date:Apr 3, 2009
Words:486
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