Chapter 5: Productivity
Updated 21 October 2022
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Summary
Key results for 2021 compared to 2020:
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Total Factor Productivity is estimated to have increased by 2.9% between 2020 and 2021. This was driven by a decrease in the volume of all inputs and an increase in the volume of all outputs.
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The volume of all outputs increased by 2.6%. 2021 saw increases in volume for all crop and livestock output categories, with the exception of fruit (-10%) and potatoes (-4.3%). These small decreases were outweighed by larger increases across other outputs, particularly in the output of ‘other crop products’ (24%) and the output of cereals (23%).
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The volume of all inputs decreased by 0.3%. This small decrease in the volume of inputs is the result of a mixed pattern of increases and decreases in 2021. The inputs that saw the largest percentage increases were plant protection products (6.3%), fertilisers (4.5%) and animal feed (3.3%). Whereas those with the largest percentage decreases were seeds (-12%), other goods and services (-5.6%) and total maintenance (-4.5%).
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.
Please note, we have re-based the data contained within this chapter to 1973. This is to improve the consistency between the figures and tables presented within. See Revisions section for more details
Long term trends
Figure 5.1: Long term trend in TFP of the UK agricultural industry (1973 = 100)
Enquiries: Josh Moatt on +44 (0) 20 771 41913
Email: [email protected]
Download the full Productivity dataset.
TFP of the agricultural industry in the United Kingdom increased by 2.9% between 2020 and 2021. This was driven by an increase in the volume of all outputs and a decrease in the volume of all inputs. As shown in Figure 5.1, 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 58%, driven by an increase in the volume of all outputs of 36% and a decrease in the volume of all inputs of 14%.
Annual changes, 2020 to 2021
Headline Figures
Figure 5.2: Summary of key indices 2020 to 2021 (1973 = 100)
Enquiries: Josh Moatt on +44 (0) 20 771 41913
Email: [email protected]
| Item | 2020 | 2021 |
|---|---|---|
| All outputs | 132.8 | 136.3 |
| All inputs | 86.3 | 86.1 |
| Total factor productivity | 153.8 | 158.4 |
Download the full Productivity dataset.
TFP is estimated to have increased by 2.9% between 2020 and 2021. This was driven by a 0.3% decrease in the volume of all inputs and a 2.6% increase in the volume of all outputs.
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: Josh Moatt on +44 (0) 20 771 41913
Email: [email protected]
| Item | 2020 | 2021 | Annual Change |
|---|---|---|---|
| Output of cereals | 143.0 | 175.6 | 23% |
| Output of industrial crops | 194.8 | 210.8 | 8.2% |
| Output of forage plants | 99.3 | 99.3 | 0.0% |
| Output of vegetables and horticultural products | 81.2 | 82.9 | 2.1% |
| Output of potatoes | 98.7 | 94.5 | -4.3% |
| Output of fruit | 131.8 | 118.4 | -10% |
| Output of other crop products | 99.2 | 122.8 | 24% |
| Total crop output | 132.9 | 142.2 | 7.0% |
| Output of livestock (meat) | 130.8 | 131.2 | 0.4% |
| Output of livestock products | 108.5 | 109.6 | 1.0% |
| Total livestock output | 121.7 | 122.4 | 0.6% |
| Inseparable non-agricultural activities | 548.9 | 534.7 | -2.6% |
| All outputs | 132.8 | 136.3 | 2.6% |
Notes:
- AHDB stopped producing potato yield data and prices in the last half of 2021. Therefore, we have looked at previous trends for the missing data and also sought views from stakeholders to estimate the value and volume of production for the sector.
Download the full Productivity dataset.
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The volume of all outputs increased by 2.6% between 2020 and 2021. This was the result of an increase of 7.0% in the volume of total crop output and an increase of 0.6% in the volume of total livestock output.
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The largest percentage increase within total crop output was in the output of other crop products, which increased by 24%. This rise in other crop products is due entirely to increases in the volume of straw produced. 2021 saw reasonable crop yields resulting in a 41% increase in the volume straw produced from 2020.
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The largest percentage decrease within total crop output was in the output of fruit, which decreased by 10%. In 2021, production of fruit was severely impacted by cold weather. Planting, bud break and early development were all delayed by wet and cold weather during February and March, and overnight frosts in April damaged many flowering fruit crops. This led to a reduction in fruit production overall.
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The biggest change in total livestock output was in the output of livestock products, which increased by 1.0%. This rise in the volume of livestock products was driven by increases in the volume of production of both eggs (6.0%) and other animal products (12%).
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: Josh Moatt on +44 (0) 20 771 41913
Email: [email protected]
| Item | 2020 | 2021 | Annual Change |
|---|---|---|---|
| Seeds | 128.4 | 113.2 | -12% |
| Energy | 48.5 | 47.5 | -2.0% |
| Fertilisers | 66.2 | 69.2 | 4.5% |
| Plant protection products | 307.1 | 326.4 | 6.3% |
| Veterinary expenses | 116.7 | 116.5 | -0.2% |
| Animal feed | 134.9 | 139.4 | 3.3% |
| Total maintenance | 59.9 | 57.2 | -4.5% |
| FISIM | 100.0 | 100.0 | 0.0% |
| Other goods and services | 139.7 | 131.8 | -5.6% |
| Intermediate consumption | 104.7 | 104.1 | -0.6% |
| Consumption of fixed capital | 122.0 | 122.3 | 0.3% |
| All labour | 51.1 | 51.0 | -0.1% |
| Land | 97.5 | 97.3 | -0.2% |
| All inputs and entrepreneurial labour | 86.3 | 86.1 | -0.3% |
Download the full Productivity dataset.
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The volume of all inputs decreased by 0.3% between 2020 and 2021. As seen in Table 5.2, this small decrease in the volume of inputs is the result of a mixed pattern of changes in 2021, with the volume of some inputs increasing and others decreasing.
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The largest percentage increase in inputs was plant protection products, which increased by 6.3%. This increase was largely driven by the use of fungicides and other plant protection products (such as plant growth regulators and molluscicides), which increased in 2021 due to a larger winter cropping area as well as relatively high disease pressure. These factors resulted in the use of more robust treatment measures over a larger area. Additional plant protection products, such as insecticides, saw decreased use in 2021 due to a reduction in area of spring crops. The increase in winter cropping and reduction in spring cropping areas, reflects a return to more traditional cropping practices in 2021, following an unusual 2020 where winter sowing was badly affected by wet weather.
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The largest percentage decrease in inputs was seeds, which decreased by 12%. The decrease in seeds seen in 2021 was the result of a return to more normal sowing practices, following an unusual 2020. In 2020, poor weather conditions during drilling of winter wheat led to many farmers switching to spring sowing, increasing seed usage. 2021 saw favourable conditions for both winter and spring sowing of crops, leading to a return to winter sowing and a reduction in the volume of seeds used overall.
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: Josh Moatt on +44 (0) 20 771 41913
Email: [email protected]
| Item | 2020 | 2021 | Annual Change |
|---|---|---|---|
| Productivity by intermediate consumption | 126.8 | 130.9 | 3.2% |
| Productivity by capital consumption | 108.9 | 111.4 | 2.3% |
| Productivity by labour | 260.2 | 267.3 | 2.7% |
| Productivity by land | 136.2 | 140.1 | 2.9% |
Figure 5.3: Long term trend in partial productivity indicators (1973 = 100)
Enquiries: Josh Moatt on +44 (0) 20 771 41913
Email: [email protected]
Download the full Productivity dataset.
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 2021 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 TFP data series has been re-based to the year 1973 (1973 = 100). In previous releases the data in the figures and tables were presented at different base years. By presenting the data series, tables and figures to the same base year, we aim to increase the consistency of the data within this release. Re-basing has no material impact on the interpretation of these data, as the year on year percentage changes will remain the same.
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The 2020 volumes for most outputs have been revised, owing to additional data becoming available since the 2020 second estimate published in December 2021.
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More accurate data was acquired for the calculation of total maintenance and capital consumption/formation, leading to some minor revisions to the back series.
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The indices for eggs have been revised from 2018 onwards, owing to an error where unpacked eggs were not included in the total value used in the calculation of the volume indices.
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The methodology for calculating the value and volume of production of potatoes has changed for 2021 compared to previous years. AHDB stopped producing potato yield data and prices in the last half of 2021. Therefore, we have looked at previous trends for the missing data and also sought views from stakeholders to estimate the value and volume of production for the sector.