Chapter 5: Productivity
Updated 20 February 2024
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Summary
Key results for 2022 compared to 2021:
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Total Factor Productivity is estimated to have increased by 3.4% between 2021 and 2022. This was driven by a decrease in the volume of all inputs and a slight increase in the volume of all outputs.
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The volume of all outputs decreased by <0.1%. 2022 saw an increase in total crop output of 1.7% whilst total livestock output decreased by 1.7%. The notable changes in crop output were increases in oilseed rape (39%) and barley (12%), with decreases in sugar beet (-18%) and in ‘vegetables and horticultural products’ (-4.9%). All livestock outputs in 2022 changed by less than 4% up or down except for the output of eggs which fell by 21%.
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The volume of all inputs decreased by 3.3%. This decrease in the volume of inputs is the result of decreases across all input items in the account except veterinary expenses and labour, which saw small increases. The inputs that saw the largest percentage decreases were fertilisers (-13%), seeds (-12%) and animal feed (-6.7%).
Figure 5.1: Summary of key indices 2021 to 2022 (1973 = 100)
Enquiries: Tim Buttanshaw on +44 (0) 20 8026 3601
Email: farmaccounts@defra.gov.uk
| Item | 2021 | 2022 |
|---|---|---|
| All outputs | 137.9 | 137.9 |
| All inputs | 85.2 | 82.4 |
| Total factor productivity | 161.8 | 167.3 |
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Introduction
Total Factor Productivity (TFP) is a measure of how well inputs are converted into outputs, giving an indication of the efficiency and competitiveness of the agricultural industry. Although external factors such as weather conditions or disease outbreaks may have a short-term impact on productivity, it is developments that improve productivity over a longer period that constitute one of the main drivers of agricultural income.
TFP estimates are derived from the aggregate farm accounts data used to calculate UK Total Income from Farming (TIFF) presented in Chapter 4.
Long term trends
Figure 5.2: Long term trend in TFP of the UK agricultural industry (1973 = 100)
Enquiries: Tim Buttanshaw on +44 (0) 20 8026 3601
Email: farmaccounts@defra.gov.uk
Text description of Figure 5.2: Figure 5.2 is a line chart showing the trend in Total Factor Productivity from 1973 to 2022. The chart is presented as an index (1973 = 100). Data is shown for All inputs, All outputs and Total factor productivity.
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TFP of the agricultural industry in the United Kingdom increased by 3.4% between 2021 and 2022. This was driven by a decrease in the volume of all inputs whilst the volume of all outputs decreased by <0.1%. As shown in Figure 5.2, this continues the pattern of annual fluctuations seen from around the year 2000 onwards. Despite this annual variability, the long-term trend is still one of slow but overall improvement in TFP.
Since the series began in 1973, TFP has increased by 67%, driven by an increase in the volume of all outputs of 38% and a decrease in the volume of all inputs of 18%.
Annual changes, 2021 to 2022
Headline Figures
All outputs
‘All outputs’ represents the change in volume (expressed as an index based to 1973) of all outputs sold off the farm, excluding transactions within the agricultural industry.
Table 5.1: Volume indices for outputs (1973 = 100)
Enquiries: Tim Buttanshaw on +44 (0) 20 8026 3601
Email: farmaccounts@defra.gov.uk
| Item | 2021 | 2022 | Annual Change |
|---|---|---|---|
| Output of cereals | 175.5 | 183.8 | 4.7% |
| Output of industrial crops | 210.6 | 237.5 | 13% |
| Output of forage plants | 99.3 | 99.3 | 0.0% |
| Output of vegetables and horticultural products | 81.8 | 77.8 | -4.9% |
| Output of potatoes | 91.6 | 85.4 | -6.9% |
| Output of fruit | 123.2 | 132.8 | 7.8% |
| Output of other crop products | 126.9 | 120.0 | -5.4% |
| Total crop output | 141.9 | 144.3 | 1.7% |
| Output of livestock (meat) | 133.3 | 132.2 | -0.8% |
| Output of livestock products | 109.4 | 105.9 | -3.2% |
| Total livestock output | 123.5 | 121.4 | -1.7% |
| Inseparable non-agricultural activities | 600.5 | 635.0 | 5.7% |
| All outputs | 137.9 | 137.9 | 0.0% |
Notes:
- Potato prices and yield information were previously obtained from the AHDB who stopped producing data midway through in 2021. For 2022 we have estimated yields based on input from sector representatives, devolved administrations and coverage of the sector in the farming press.
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The volume of all outputs decreased by <0.1% between 2021 and 2022. This was the result of an increase of 1.7% in the volume of total crop output and a decrease of 1.7% in the volume of total livestock output.
The largest percentage increase within total crop output was in the industrial crops, which increased by 13%. This rise in industrial crops was primarily due to a 39% increase in the volume of oilseed rape produced, as a result of an 19% increase in the area grown and a 16% increase in average yield from 2021.
The biggest change in total livestock output was in the output of livestock products, which decreased by 3.2%. This fall in the volume of livestock products was driven by a 22% decrease in the volume of production of eggs, which was impacted by Avian Influenza, high input costs and a sectoral shift away from intensive and towards free range/barn production systems.
All inputs
‘All inputs’ represents the change in volume (expressed as an index based to 1973) of all goods and services purchased and consumed, excluding transactions within the agricultural industry.
Table 5.2: Volume indices for inputs (1973 = 100)
Enquiries: Tim Buttanshaw on +44 (0) 20 8026 3601
Email: farmaccounts@defra.gov.uk
| Item | 2021 | 2022 | Annual Change |
|---|---|---|---|
| Seeds | 115.7 | 101.9 | -12% |
| Energy | 49.1 | 48.1 | -2.1% |
| Fertilisers | 59.9 | 52.2 | -13% |
| Plant protection products | 299.5 | 298.4 | -0.4% |
| Veterinary expenses | 121.1 | 122.9 | 1.5% |
| Animal feed | 136.2 | 127.2 | -6.7% |
| Total maintenance | 57.8 | 54.1 | -6.3% |
| FISIM | 100.0 | 100.0 | 0.0% |
| Other goods and services | 129.9 | 127.6 | -1.8% |
| Intermediate consumption | 101.9 | 96.1 | -5.7% |
| Consumption of fixed capital | 123.0 | 122.9 | -0.1% |
| All labour | 51.2 | 51.2 | 0.1% |
| Land | 97.3 | 95.1 | -2.2% |
| All inputs and entrepreneurial labour | 85.2 | 82.4 | -3.3% |
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The volume of all inputs decreased by 3.3% between 2021 and 2022. As seen in Table 5.2, this decrease in the volume of inputs is the result of decreases across all of the individual items apart from veterinary expenses and labour in 2022.
The largest percentage decrease in inputs was fertilisers, which decreased by 13%. The decrease in fertiliser seen in 2022 was the result of farmers cutting down on fertiliser usage in response to record high prices. Fertiliser production is energy intensive and the industry was heavily impacted by increasing natural gas prices, resulting in reduced domestic production and supply. The reduction in volume of 13% came about because farmers were incentivised, by the high cost of fertiliser, to target application far more specifically than in other years, something which was only feasible due to the excellent growing conditions from late 2021 into 2022.
The second largest decrease in inputs was in seeds which decreased by 12% from 2021, primarily in the cereals sector. Seed usage is driven by a combination of crop area, time of drilling, and drilling conditions. For crops planted in spring 2022, seed rates decreased as a result of good drilling conditions, which enabled crops to be sown during optimal time windows without needing to increase the seed rate. The area of spring 2022 crops also decreased from 2021 due to an increase in winter cropping (planted in autumn 2021), with a 13% reduction seen in the area of spring barley. Favourable weather conditions also led to a slight increase in winter crop areas in autumn 2022 from 2021.
Partial productivity
Partial productivity shows the impact key inputs have on productivity. It measures total outputs against a part of the inputs.
Table 5.3: Partial factor productivity (1973 = 100)
Enquiries: Tim Buttanshaw on +44 (0) 20 8026 3601
Email: farmaccounts@defra.gov.uk
| Item | 2021 | 2022 | Annual Change |
|---|---|---|---|
| Productivity by intermediate consumption | 135.4 | 143.5 | 6.0% |
| Productivity by capital consumption | 112.1 | 112.2 | 0.1% |
| Productivity by labour | 269.4 | 269.0 | -0.1% |
| Productivity by land | 141.7 | 144.9 | 2.2% |
Figure 5.3: Long term trend in partial productivity indicators (1973 = 100)
Enquiries: Tim Buttanshaw on +44 (0) 20 8026 3601 Email: farmaccounts@defra.gov.uk
Download the full Productivity dataset
Text description of Figure 5.3: Figure 5.3 is a line chart showing the long term trend in partial productivity indicators from 1973 to 2022. The chart is presented as an index (1973 = 100). Data is shown for labour, land, intermediate consumption and capital consumption.
Table 5.3 and Figure 5.3 show that labour is the key input driving productivity gains. Productivity by labour shows a steady increase over the whole period since 1973. Labour volumes are now approximately half of what they were in 1973. However, more recent growth in labour productivity is due to increased output rather than a reduction in labour volume.
Revisions
Figures for 2022 are provisional and subject to revision.
As a result of more data becoming available over time there have been minor revisions to earlier years in this release. These revisions are intended to enhance the precision of these estimates. Sometimes additional revisions are necessary to refine the methodology or correct historical errors.
Below are a list of key revisions that have been carried out since the last publication:
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The 2021 volumes for most outputs have been revised slightly, owing to additional data becoming available since the publication of the estimate for 2021 in May 2022.
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The volume indices for poultry have been revised for 2021 following a review of the methodology for acquiring slaughter numbers.
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Potato prices and yield information were previously obtained from the AHDB who stopped producing data midway through in 2021. For 2022 we have estimated yields based on input from sector representatives, devolved administrations and coverage of the sector in the farming press.
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The 2021 volume indices for inputs have been updated following incorporation of the latest available survey data, which has replaced market intelligence and forecast data that were previously used in production of the estimates. The most notable changes are decreases in fertiliser and plant protection products. These items saw larger changes due to manufacturing difficulties in the UK following the closure of factories due to the cost of production.