Total Factor Productivity of the United Kingdom agricultural industry in 2023
Updated 10 June 2024
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This release presents the estimate of Total Factor Productivity (TFP) of the UK agricultural industry for 2023. It also presents volume indices for inputs and outputs. These figures include updates to the figures published in May 2023 following data updates.
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). TIFF estimates for 2023 are published in parallel with these and can be found on the aggregate agricultural accounts page.
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1. Key messages
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Total Factor Productivity (TFP) 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 (15.3%) driven by a reduction in prices.
Figure 1: Summary of key indices 2022 to 2023 (1973 = 100)
| Item | 2022 | 2023 |
|---|---|---|
| All outputs | 138.7 | 131.8 |
| All inputs | 82.4 | 82.6 |
| Total factor productivity | 168.2 | 159.6 |
2. Long term trends
Figure 2: Long term trends in TFP of the UK agricultural industry (1973 = 100)
TFP of the agricultural industry in the United Kingdom 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. As shown in Figure 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 59.6%, driven by an increase in the volume of all outputs by 31.8% and a decrease in the volume of all inputs by 17.4%.
3. Annual changes, 2022 to 2023
3.1 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 1. Volume indices for outputs (1973 = 100)
| Item | 2022 | 2023 | Annual Change |
|---|---|---|---|
| Output of cereals | 190.3 | 160.7 | -15.6% |
| 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 | -11.6% |
| 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% |
| Inseparable non-agricultural activities | 581.9 | 575.9 | -1.0% |
| All outputs | 138.7 | 131.8 | -5.0% |
Notes:
- Potato prices and yield information were previously obtained from the AHDB who stopped producing data midway through in 2021. From 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 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%).
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The largest percentage decrease within total crop output between 2022 and 2023 was in cereals, which decreased by 15.6%. This was driven by decreases in the production of both wheat and barley in 2023. Harvested wheat production decreased by 10.6% 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%.
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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 decrease.
3.2 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 2: Volume indices for inputs (1973 = 100)
| Item | 2022 | 2023 | Annual Change |
|---|---|---|---|
| Seeds | 124.8 | 122.7 | -1.7% |
| Energy | 43.4 | 44.7 | 3.0% |
| Fertilisers | 40.1 | 46.2 | 15.3% |
| 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:
- To improve clarity, the item FISIM (Financial Intermediary Services Indirectly Measured) has been renamed ‘Bank charges’ from this release onwards.
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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 15.3% and, together with other smaller increases, more than offset small decreases in items such as animal feed (-2.1%) and land (-2.3%).
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The prices of straight fertiliser in 2023 were between 26.0% and 41.3% 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.
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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.
4. Partial productivity
Partial productivity shows the impact key inputs have on productivity. It measures total outputs against a part of the inputs.
Table 3: Partial factor productivity (1973 = 100)
| 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 3: Long term trends in partial productivity indicators (1973 = 100)
Table 3 and Figure 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.
5. About these statistics
5.1 Contact details
Responsible statistician: Alexandra Hall
Email: farmaccounts@defra.gov.uk
Telephone enquiries: 020 7714 1374
Media enquiries: 0345 051 8486
Public enquiries: 0845 601 3034
Kings Pool
1-2 Peasholme Green
York
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5.2 Revisions
This release represents the estimate for TFP 2023 in the United Kingdom. At the time of publication, not all data is available and some values have been forecasted. Consequently, this release is subject to a degree of revision when final estimates are published later in the year.
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:
- There have been small changes to data from 2010 - 2022 as published in TFP 2022 in the United Kingdom. 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.
5.3 Accredited official statistics status
Accredited official statistics are called National Statistics in the Statistics and Registration Service Act 2007. An explanation can be found on the Office for Statistics Regulation website.
Our statistical practice is regulated by the Office for Statistics Regulation (OSR). OSR sets the standards of trustworthiness, quality and value in the Code of Practice for Statistics that all producers of official statistics should adhere to.
These accredited official statistics were independently reviewed by the Office for Statistics Regulation in December 2017. They comply with the standards of trustworthiness, quality and value in the Code of Practice for Statistics and should be labelled ‘accredited official statistics’.
You are welcome to contact us directly with any comments about how we meet these standards (see contact details above). Alternatively, you can contact OSR by emailing regulation@statistics.gov.uk or via the OSR website.
Since the latest review by the Office for Statistics Regulation, we have continued to comply with the Code of Practice for Statistics, and have enhanced data quality by reviewing methodologies and data sources.
5.4 Background to TFP
These results are produced as part of the preparation of aggregate agricultural accounts UK Accredited Official Statistics. The agricultural accounts are also used to produce other measures of performance of the agricultural industry, including Total Income from Farming.
5.5 Quality assurance
Defra has in place quality assurance processes to check the accuracy and reliability of the aggregate agricultural accounts that includes:
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Ongoing review of methods employed in the calculation of the accounts.
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Assessment of the quality of the estimates of components of the accounts with internal and external experts.
A summary quality report for this statistical release can be found on the GOV.UK website.
This is an overview note which is not release-specific but will be reviewed and updated at regular intervals. It pulls together key qualitative information on the various dimensions of quality as well as providing a summary of methods used to compile the output. It provides users with information on usability and fitness for purpose of these estimates.
5.6 Main uses and users of TFP
TFP is used in conjunction with other economic information to:
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Inform policy decisions and to help monitor and evaluate current policies relating to agriculture in the UK by Government.
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Inform stakeholders of the performance of the agricultural industry.
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Inform research into the economic performance of the agricultural industry.
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As an impact indicator of Government policy.
5.7 User engagement
As part of our ongoing commitment to compliance with the Code of Practice for Official Statistics, we wish to strengthen our engagement with users of these statistics and better understand the use made of them and the types of decisions that they inform. Consequently, we invite users to make themselves known, to advise us of the use they do, or might, make of these statistics, and what their wishes are in terms of engagement. We welcome any enquiries about these statistics and are keen to hear what we could do to improve this release for users. Please take the time to complete a short feedback form to help us better understand user needs.