Chapter 5: Productivity
Updated 8 July 2024
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Summary
Key results for 2023 compared to 2022:
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Total Factor Productivity is estimated to have decreased by 5.1% between 2022 and 2023. This was driven by a decrease in the volume of outputs and a slight increase in the volume of inputs.
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The volume of all outputs decreased by 5.0%. There were decreases across all output groups apart from industrial crops which saw a 2.7% increase. This increase for industrial crops was more than offset by decreases across other crops to give an overall reduction in the volume of total crop output of 7.9%. There were also decreases across all livestock volumes, with a 5.4% decrease in livestock for meat and a 0.8% decrease in the volume of other livestock products.
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The volume of all inputs increased by 0.1%. There was a mixture of increases and decreases in the volume of inputs used, with fertiliser showing the largest increase driven by a reduction in prices.
Figure 5.1: Summary of key indices 2022 to 2023 (1973 = 100)
Enquiries: Alexandra Hall on +44 (0)20 7714 1374
Email: farmaccounts@defra.gov.uk
| Item | 2022 | 2023 |
|---|---|---|
| All outputs | 138.7 | 131.8 |
| All inputs | 82.4 | 82.6 |
| Total factor productivity | 168.2 | 159.6 |
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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: Accounts.
Long term trends
Figure 5.2: Long term trends in TFP of the UK agricultural industry (1973 = 100)
Enquiries: Alexandra Hall on +44 (0)20 7714 1374
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 2023. 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 decreased by 5.1% between 2022 and 2023. Since the series began in 1973, TFP has increased by 60%, driven by an increase in the volume of all outputs of 32% and a decrease in the volume of all inputs of 17%.
Annual changes, 2022 to 2023
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: Alexandra Hall on +44 (0)20 7714 1374
Email: farmaccounts@defra.gov.uk
| Item | 2022 | 2023 | Annual Change |
|---|---|---|---|
| Output of cereals | 190.3 | 160.7 | -16% |
| Output of industrial crops | 235.0 | 241.3 | 2.7% |
| Output of forage plants | 99.3 | 99.3 | 0.0% |
| Output of vegetables and horticultural products | 77.3 | 77.0 | -0.4% |
| Output of potatoes | 90.2 | 84.0 | -6.9% |
| Output of fruit | 134.0 | 118.5 | -12% |
| Output of other crop products | 120.1 | 118.5 | -1.3% |
| Total crop output | 146.6 | 135.0 | -7.9% |
| Output of livestock (meat) | 132.4 | 125.2 | -5.4% |
| Output of livestock products | 108.5 | 107.6 | -0.8% |
| Total livestock output | 122.6 | 118.2 | -3.6% |
| Diversification | 581.9 | 575.9 | -1.0% |
| All outputs | 138.7 | 131.8 | -5.0% |
Notes
- Diversification has replaced the name of the item ‘Inseparable non-agricultural activities’ for clarity following feedback on our statistical release.
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The volume of all outputs decreased by 5.0% between 2022 and 2023. This was the result of decreases in both the volume of total crop output (-7.9%) and the volume of total livestock output (-3.6%).
The largest percentage decrease within total crop output between 2022 and 2023 was in cereals, which decreased by 16%. This was driven by decreases in the production of both wheat and barley in 2023. Harvested wheat production decreased by 11% from 2022, as a result of a decline in both the area planted (5.1%) and the yield. Harvested barley production in 2023 decreased by 5.7%, despite a slight increase in the area grown, with yields down by 7.5%.
The biggest change in total livestock output was in the output of livestock for meat, which decreased by 5.4%. This was driven by decreases in the volume of production of all livestock animals for meat with pigmeat seeing the largest decreases.
All inputs
‘All inputs and entrepreneurial labour’ 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: Alexandra Hall on +44 (0)20 7714 1374
Email: farmaccounts@defra.gov.uk
| Item | 2022 | 2023 | Annual Change |
|---|---|---|---|
| Seeds | 124.8 | 122.7 | -1.7% |
| Energy | 43.4 | 44.7 | 3.0% |
| Fertilisers | 40.1 | 46.2 | 15% |
| Plant protection products | 298.0 | 286.3 | -3.9% |
| Veterinary expenses | 123.3 | 122.2 | -0.9% |
| Animal feed | 130.5 | 127.7 | -2.1% |
| Total maintenance | 55.7 | 57.2 | 2.7% |
| Bank charges | 100.0 | 100.0 | 0.0% |
| Other goods and services | 130.5 | 130.4 | -0.1% |
| Intermediate consumption | 95.2 | 95.9 | 0.8% |
| Consumption of fixed capital | 124.5 | 124.2 | -0.3% |
| All labour | 51.6 | 51.4 | -0.4% |
| Land | 98.4 | 96.1 | -2.3% |
| All inputs and entrepreneurial labour | 82.4 | 82.6 | 0.1% |
Notes
- Bank charges has replaced the name of the item FISIM (Financial Intermediary Services Indirectly Measured) for clarity following feedback on our statistical release.
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The volume of all inputs and entrepreneurial labour increased by 0.1% between 2022 and 2023. This increase was driven mainly by fertiliser which increased by 15% and, together with other smaller increases, more than offset small decreases in items such as animal feed and land.
The prices of straight fertiliser in 2023 were between 26% and 41% lower than in 2022, which encouraged farmers to apply more fertiliser. Having seen good results from more targeted applications of fertiliser in the previous year, and given that fertiliser prices were still higher than 2021, we did not see returns to pre-2022 levels of fertiliser use.
Animal feed is made up of compound animal feed, straight animal feed and animal feed fed on farm. In 2023, the total volume of animal feed decreased by 2.1% from 2022. This decrease was driven by a 3.6% reduction in compound feed, the largest subcategory. The reduction in the volume of compound feed resulted from decreased usage, which was driven by a reduction in livestock populations, particularly in the pig and poultry sectors, where herd and flock sizes have declined.
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: Alexandra Hall on +44 (0)20 7714 1374
Email: farmaccounts@defra.gov.uk
| Item | 2022 | 2023 | Annual Change |
|---|---|---|---|
| Productivity by intermediate consumption | 145.7 | 137.4 | -5.7% |
| Productivity by capital consumption | 111.4 | 106.1 | -4.7% |
| Productivity by labour | 268.8 | 256.4 | -4.6% |
| Productivity by land | 140.9 | 137.1 | -2.7% |
Figure 5.3: Long term trends in partial productivity indicators (1973 = 100)
Enquiries: Alexandra Hall
Email: farmaccounts@defra.gov.uk
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 2023. The chart is presented as an index (1973 = 100). Data is shown for labour, land, intermediate consumption and capital consumption.
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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 2023 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.
There have been small changes to data from 2010 - 2022 as published in AUK 2022. This is as result of minor methodological changes which have been made to streamline our data processing. TFP, as outlined elsewhere in this release, is primarily focused on trends and these methodological changes have not impacted the trend in TFP from 2010, which has been one of increased productivity.