Chapter 4: Accounts
Updated 20 February 2024
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There may be small discrepancies between numbers presented in this chapter and those in Chapter 7: Crops and Chapter 8: Livestock due to slight differences in calculation methodology and minor data revisions since the UK Accounts were computed. There has been one more substantial data revision for eggs, which is detailed in the Livestock section of this chapter.
Summary
In this section, all values are provided in current prices which is considered the most intuitive approach for comparisons over a short time period. It should be noted that these values have not been adjusted for inflation, which was unusually high in 2022 at 5.0%.
Key results for 2022:
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UK Total Income from Farming (TIFF) in 2022 was £7.9 billion, an increase of £1.1 billion (17%) from 2021. Following an exceptional year of price volatility, this large increase in TIFF was driven by price increases across the majority of commodities in this account, which more than offset increases in input prices.
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Total livestock output in 2022 was £19.3 billion, an increase of £2.7 billion (16%) from 2021. This increase was driven by a substantial 40% increase in the value of milk, which is consistently the largest contributor to livestock value. Milk reached record high farmgate prices of up to 51.6 pence per litre in 2022 as a result of high production costs, which also led to a slight reduction in production and supply.
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In 2022, total crop output increased by £2.4 billion (22%) from 2021, to £13.3 billion. This increase was driven by a 50% increase in the value of wheat, which saw a 35% increase in unit price following disruption to the global cereals market from the war in Ukraine, as well as a 10% increase in average yield boosted by favourable planting conditions in the autumn of 2021.
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Intermediate consumption increased by £3.6 billion (19%) from 2021, to £22.1 billion in 2022. This increase was predominantly driven by a 24% increase in the value of compound animal feed, which is consistently the largest contributor to intermediate consumption, and a 78% increase in the value of fertiliser. The average price of fertiliser increased by 104% from 2021, following substantially reduced domestic production as a result of rising natural gas prices.
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In 2022, agriculture’s contribution to the UK economy (Gross Value Added at basic prices) was £13.9 billion (0.6% of GDP). This constitutes an increase of £1.8 billion (15%) in GVA compared to 2021.
Introduction
This chapter shows production and income accounts for agriculture in the United Kingdom.
These accounts conform to internationally agreed accounting principles required by the United Kingdom’s Office for National Statistics.
Total Income from Farming is the total profit from all UK farming businesses on a calendar year basis. It measures the return to all entrepreneurs for their management, inputs, labour and capital invested. For differences between TIFF and Farm Business Income statistics presented in Chapter 3, see Table 3.3.
When comparing more recent years, values are presented at current prices (not adjusted for inflation). For long term trends in TIFF, values are presented in real terms. This means the figures have been adjusted to account for inflation, which allows more meaningful comparisons between years over the longer term.
TIFF in recent years
In this section, all values are provided in current prices which is considered the most intuitive approach for comparisons over a short time period. It should be noted that these values have not been adjusted for inflation, which was unusually high in 2022 at 5.0%.
Figure 4.1: Total Income from Farming for the United Kingdom: 2017 to 2022 at current prices
Enquiries: Tim Buttanshaw on +44 (0) 20 8026 3601
Email: [email protected]
Text description of Figure 4.1: Figure 4.1 shows the value of TIFF from 2017 to 2022 at current prices. TIFF is presented in billions.
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Since 2017, the average value of TIFF has been £6.0 billion, with the lowest value of £4.9 billion occurring in 2018, and the highest value of £7.9 billion occurring in 2022, an increase of £1.1 billion (17%) from 2021.
Below we provide a detailed comparison of the TIFF account from recent years in current terms. This approach is considered the most intuitive for comparisons over a short time period.
Outputs and subsidies
In this section, all values are provided in current prices which is considered the most intuitive approach for comparisons over a short time period. It should be noted that these values have not been adjusted for inflation, which was unusually high in 2022 at 5.0%.
Overview
Figure 4.2: Summary of outputs and subsidies, 2017 to 2022
Enquiries: Tim Buttanshaw on +44 (0) 20 8026 3601
Email: [email protected]
Text description of Figure 4.2: Figure 4.2 shows the value of all outputs and subsidies from 2017 to 2022. Values are presented in millions. Outputs and subsidies represent all financial incomes to farmers. Total livestock output is consistently the largest contributor to the value of all outputs and subsidies.
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In 2022, total livestock output was £19,261 million, an increase of £2,687 million (16%) on 2021. The second largest contribution to the value of outputs and subsidies in 2022 was total crop output at £13,330 million, an increase of £2,398 million (22%) on 2021. The remaining incomes to farmers in 2022 were subsidies (£3,120 million), inseparable non-agricultural activities (£1,857 million) and other agricultural activities (£1,448 million).
Total livestock output
Egg production figures have been revised following the publication of Total Income from Farming 2022. As such, the 2022 egg production and value of production figures quoted here will differ from those in Chapter 8: Livestock.
Figure 4.3: Main contributions to total livestock output (£ million)
Enquiries: Tim Buttanshaw on +44 (0) 20 8026 3601
Email: [email protected]
| Item | 2021 | 2022 |
|---|---|---|
| Milk | 4,768 | 6,655 |
| Beef | 3,349 | 3,758 |
| Poultry | 3,031 | 3,149 |
| Pigmeat | 1,461 | 1,727 |
| Mutton and lamb | 1,574 | 1,626 |
| Livestock gross fixed capital formation | 1,422 | 1,539 |
| Eggs | 818 | 640 |
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The largest contribution to total livestock output in 2022 was milk with a value of £6,655 million. Milk also has the largest increase in value within total livestock output, with an increase of £1,887 million (40%) from 2021. This value increase was due to an increase in the price of milk, with the farmgate price of milk per litre being 12.9p (41%) higher than in 2021. Historically milk prices have been increasing steadily year-on-year whilst following a seasonal pattern of rising to a high in winter and falling to a low in early summer. Milk prices started in 2022 at an all time high, in current prices, and continued to rise every month throughout the year. These price increases were driven by a record high cost of production, which initially pushed some farmers out of the industry. However, the high milk prices encouraged farmers to keep production volumes high and so the volume of milk production was only down by 0.5% from 2021.
In 2022, the second largest increase in value in total livestock output was beef with an increase of £409 million (12%) on 2021. 2022 saw another year of high beef production with the volume of production increasing by 2.0% from 2021. Although demand for beef declined slightly at the beginning of the year, prices remained high as drought and increased feed costs led to some tightness in supply. Prices for beef were on average 8.7% higher each month than in 2021.
The largest decrease in value was eggs, with a decrease of £178 million (-22%) on 2021, driven by an overall decrease in production and a lower proportion of high value free range eggs, which together outweighed the impact of price increases throughout the year. There was a general decrease in production as a result of high input costs, Avian Influenza and a sectoral shift away from intensive and towards free range/barn production systems. Additionally, housing orders due to Avian Influenza in Spring and Winter 2022 meant that eggs normally produced through free range systems were instead sold as lower value barn eggs.
Total crop output
Figure 4.4: Main contributions to total crop output (£ million)
Enquiries: Tim Buttanshaw on +44 (0) 20 8026 3601
Email: [email protected]
| Item | 2021 | 2022 |
|---|---|---|
| Wheat | 2,705 | 4,059 |
| Barley | 1,168 | 1,815 |
| Fresh vegetables | 1,685 | 1,770 |
| Plants and flowers | 1,562 | 1,538 |
| Fruit | 890 | 989 |
| Oilseed rape | 488 | 878 |
| Potatoes | 746 | 705 |
| Other crop products | 845 | 601 |
| Other industrial crops | 426 | 456 |
| Forage plants | 205 | 158 |
Notes:
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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. For prices we made use of the Northern Ireland published potato price figures.
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‘Other industrial crops’ includes the value of protein crops and sugar beet.
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The largest contribution to total crop output in 2022 was wheat with a value of £4,059 million. Wheat also saw the largest increase in value within total crop output, with an increase of £1,354 million (50%) from 2021, as a result of increases in both price and volume of production. In 2022 the unit value of wheat increased by 35% because the global cereals market was severely impacted by the invasion of Ukraine by Russia in February 2022. The volume of wheat produced in 2022 was 11% higher than in 2021, driven by an increased average yield of 10%. The crop benefited from strong planting conditions at the end of 2021 and was able to be harvested slightly earlier because of the unusually hot summer months.
In 2022, the second largest increase in value within total crop output was barley, with an increase of £647 million (55%) from 2021, driven by a price increase of 45%. This moved barley from its usual position as the fourth or fifth largest contributor to total crop value to have the second largest output value of any crop in the account. As for wheat, the price increase was mainly dictated by the global cereals market, but there was also a bounce back of the brewing industry following Covid-19 which increased demand for barley and therefore price. Both winter and spring barley saw an increase in yield and, despite the reduction in planting area of spring barley, there was an overall increased production of barley in 2022 of 7.0%.
Oilseed rape in 2022 saw a substantial increase in value of £390 million (80%) from 2021. This increase was due to a 19% increase in area grown (though this was still the second lowest area since 1989) combined with a 16% increase in yield which led to a 39% increase in volume of production. Oilseed rape prices increased sharply following the instigation of the conflict in Ukraine, peaking in April before coming back down as the year went on, with an overall average price increase of 30%. Despite the high prices farmers are wary of growing oilseed rape due to the banning of common treatments that help stave off the cabbage stem flea beetle.
Other Outputs and Subsidies
Table 4.1: Breakdown of other incomes and subsidies (£ million)
Enquiries: Tim Buttanshaw on +44 (0) 20 8026 3601
Email: [email protected]
| Item | 2021 | 2022 |
|---|---|---|
| Subsidies not linked to production | 3,266 | 3,073 |
| Inseparable non-agricultural activities | 1,681 | 1,857 |
| Other agricultural activities | 1,354 | 1,448 |
| Subsidies linked to production | 47 | 47 |
Notes:
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Since 2012, subsidies linked to production have only been paid in Scotland.
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‘Subsidies not linked to production’ includes all subsidies not directly linked to production, including the basic payment scheme and agri-environment schemes.
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Inputs and costs
In this section, all values are provided in current prices which is considered the most intuitive approach for comparisons over a short time period. It should be noted that these values have not been adjusted for inflation, which was unusually high in 2022 at 5.0%.
Overview
Figure 4.5: Summary of inputs and costs, 2017 to 2022
Enquiries: Tim Buttanshaw on +44 (0) 20 8026 3601
Email: [email protected]
Text description of Figure 4.5: Figure 4.5 shows the make-up of all inputs and costs from 2017 to 2022. Inputs and costs represent all money paid out by farmers during a calendar year. Values are presented in millions.
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The make-up of all inputs and costs has been remarkably constant for the last 5 years. The largest cost facing farmers is intermediate consumption. In 2022 the value of intermediate consumption was £22,084 million, an increase of £3,560 million (19%) on 2021. The remaining costs in 2022 were total consumption of fixed capital (£5,116 million), compensation of employees (£2,828 million) and other costs (£1,047 million).
Inputs: Intermediate consumption
Figure 4.6: Main contributions to intermediate consumption (£ million)
Enquiries: Tim Buttanshaw on +44 (0) 20 8026 3601
Email: [email protected]
| Item | 2021 | 2022 |
|---|---|---|
| Animal feed: compounds | 3,998 | 4,945 |
| Other goods and services | 3,487 | 3,378 |
| Fertilisers | 1,400 | 2,490 |
| Total maintenance | 1,923 | 2,005 |
| Animal feed: straights | 1,778 | 1,926 |
| Agricultural services | 1,354 | 1,448 |
| Animal feed: other | 803 | 1,398 |
| Motor and machinery fuels | 921 | 1,371 |
| Plant protection products | 880 | 967 |
| Electricity and fuels for heating | 527 | 767 |
| Seeds | 812 | 748 |
| Veterinary expenses | 482 | 496 |
Notes:
- Animal feed: other represents feed produced and used on farm or purchased from other farms.
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The largest contribution to intermediate consumption was compound animal feed with a value of £4,945 million, an increase of £946 million (24%) from 2021. In 2022 the volume of compound animal feed decreased across most sectors which led to a 4.5% overall reduction in volume from 2021. This reduction in volume was countered by a 30% increase in price which caused the overall increase in value.
The largest increase in value in intermediate consumption in 2022 was fertilisers, with an increase of £1,091 million (78%) from 2021. This rise was due to an increase in the price of fertiliser that far outweighed the reduction in volume used. Fertiliser production is energy intensive and the industry was heavily impacted by increasing natural gas prices, resulting in reduced domestic production and supply. In 2022 the average price of fertiliser increased by 104% from 2021 (with some individual fertiliser prices up by more than 300%). 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.
Total energy consumption (‘motor and machinery fuels’ and ‘electricity and fuels for heating’) saw an increase of £690 million (48%) from 2021 to 2022. This is reflective of the wider UK energy crisis, which has been further impacted by the war in Ukraine. There was a slight reduction in volume, primarily in electricity and fuels for heating, as less drying of crops was required due to warm harvesting weather.
Other Inputs and Costs
Table 4.2: Breakdown of other inputs and costs (£ million)
Enquiries: Tim Buttanshaw on +44 (0) 20 8026 3601
Email: [email protected]
| Item | 2021 | 2022 |
|---|---|---|
| Total consumption of fixed capital | 4,701 | 5,116 |
| Equipment consumption of fixed capital | 2,144 | 2,353 |
| Livestock consumption of fixed capital | 1,438 | 1,544 |
| Buildings consumption of fixed capital | 1,120 | 1,220 |
| Other taxes on production | -104 | -104 |
| Compensation of employees | 2,781 | 2,828 |
| Rent | 541 | 537 |
| Interest | 392 | 406 |
Notes:
- Due to high variability in the wages data, used in the calculation of compensation of employees, for the year 2021/2022, data for 2020/2021 has been carried forward. See Revisions for details
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Long Term Trends in TIFF
Values in this section are expressed in real terms at 2022 prices. The figures have been adjusted to account for inflation, which allows more meaningful comparisons between years over the longer term. However it should be noted that inflation was unusually high in 2022 at 5.0%.
Values in this section are expressed in real terms at 2022 prices. The figures have been adjusted to account for inflation, which allows more meaningful comparisons between years over the longer term. However it should be noted that inflation was unusually high in 2022 at 5.0%.
Figure 4.7: Long term trends in TIFF, 2000 to 2022
Enquiries: Tim Buttanshaw on +44 (0) 20 8026 3601
Email: [email protected]
Text description of Figure 4.7: Figure 4.7 shows the long term trend in TIFF from 2000 to 2022. TIFF is presented in millions.
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Table 4.3: Headline figures in real terms 2017 to 2022 (£ billion)
Enquiries: Tim Buttanshaw on +44 (0) 20 8026 3601
Email: [email protected]
| Item | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 |
|---|---|---|---|---|---|---|
| Total crop output | 10.7 | 10.8 | 11.2 | 9.6 | 11.5 | 13.3 |
| Total livestock output | 16.5 | 16.5 | 16.2 | 16.0 | 17.4 | 19.3 |
| Total intermediate consumption | 18.3 | 19.3 | 19.1 | 17.7 | 19.5 | 22.1 |
| Total income from farming | 6.5 | 5.5 | 5.8 | 5.5 | 7.2 | 7.9 |
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In real terms, UK TIFF rose strongly between 2000 and 2008, then remained around the £4 billion to £6 billion range, with some large year-on-year fluctuations, up to 2020.
TIFF fell sharply in 2015 driven by lower commodity prices and a stronger pound. In 2016 the exchange rate improved but a poor harvest and continued low commodity prices kept income low. In 2017, TIFF reached the highest point for 20 years as a result of a favourable combination of a weaker pound, strong commodity prices and high levels of production. In 2018, extreme weather conditions led to poor yields and pushed up the price of key inputs. These factors were not fully offset by strong commodity prices resulting in a 14.7% fall in TIFF that year.
More recently, favourable weather in 2019 produced modest increases to both crop output and TIFF. In 2020, poor weather during winter sowing resulted in the lowest wheat value, in real terms, since 2006. This was offset by a strong year for livestock and relatively low year for costs, resulting in a modest 5.1% fall in TIFF from 2019. 2021 saw more typical weather than 2020 resulting in a large increase in output values, particularly crops, which outweighed increases in inputs and costs. This, combined with inflation of less than 0.1%, led to the sharp increase (29.1%) in TIFF seen between 2020 and 2021.
In 2022, TIFF was £7.9 billion, an increase of £0.8 billion (11%) in real terms from 2021. Although high prices raised input costs, these were outweighed by high output prices resulting in the highest TIFF value, in real terms, since 1995.
Balance Sheet for the United Kingdom Agricultural Industry
Table 4.4: Balance sheet (£ million)
| Item | 2019 | 2020 | 2021 | 2022 |
|---|---|---|---|---|
| Total fixed assets | 275,284 | 286,416 | 329,139 | 324,802 |
| Total current assets | 15,334 | 16,306 | 16,676 | 18,392 |
| Total assets | 290,619 | 302,722 | 345,815 | 343,194 |
| Total long and medium term liabilities | 15,286 | 15,523 | 15,696 | 15,587 |
| Total short term liabilities | 6,003 | 5,466 | 5,543 | 5,582 |
| Total liabilities | 21,290 | 20,989 | 21,239 | 21,169 |
| Net worth | 269,329 | 281,733 | 324,576 | 322,025 |
Notes:
- Balance sheet as at December each year
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Table 4.4 presents the agricultural balance sheet which values the assets and liabilities for agriculture at the end of each calendar year and estimates the net worth of the industry. Overall net worth is estimated to have been £322,025 million in 2022, a decrease of £2,551 million (-0.8%) on 2021. This was the result of a decrease in total assets of -0.8% and a decrease in total liabilities of -0.3%. Land is the largest fixed asset in the agricultural industry with a value of £277,001 million in 2022, a decrease of -2.0% on 2021.
Table 4.5: Balance sheet in real terms (£ million)
| Item | 2019 | 2020 | 2021 | 2022 |
|---|---|---|---|---|
| Total assets | 323,458 | 318,158 | 363,105 | 343,194 |
| Total liabilities | 23,695 | 22,059 | 22,301 | 21,169 |
| Net worth | 299,763 | 296,099 | 340,805 | 322,025 |
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In real terms at 2022 prices, net worth decreased by -5.5% from 2021. Total assets decreased by -5.5% and total liabilities decreased by -5.1%.
Revisions
The estimate of TIFF for 2021, published in May 2022, has been revised upwards by £813 million (13.5%). TIFF is calculated as the (relatively small) difference between two large numbers, ‘outputs and subsidies’ and ‘inputs and costs’, and so minor changes in these numbers can feed through to cause a large change in the value of TIFF. The 13.5% increase in TIFF in 2021 is the result of a 1.0% increase in ‘outputs and subsidies’ and a 1.6% decrease in ‘inputs and costs (See Table 6 below).
Table 4.6: Revisions in total outputs, costs and TIFF (£ million)
| Item | Previous estimate for 2021 (Published May 2022) | Current estimate for 2021 (Published May 2023) | % change (from May 22 to May 23 estimate) |
|---|---|---|---|
| All outputs and subsidies | 33,221 | 33,751 | 1.6% |
| All inputs and costs | 27,223 | 26,940 | -1.0% |
| Total income from farming | 5,998 | 6,811 | 13.5% |
The main amendments on the output side of the account were in inseparable non-agricultural activities (diversification) and in the value of poultry. Due to a lack of data at the time of the previous release the value for diversification was carried forward from 2020, this year using the Farm Business Survey data we have estimated diversification in 2021 to be £184 million higher than the previously used value. The value of poultry for meat for 2021 was revised upwards due to a change in the methodology in estimating hatchery numbers, this had the effect of increasing the value of poultry by £130 million.
Table 4.7: Revisions larger than £100 million in outputs from 2021 (£ million)
| Item | Previous estimate for 2021 (Published May 2022) | Current estimate for 2021 (Published May 2023) | % change (from May 22 to May 23 estimate) |
|---|---|---|---|
| Poultry | 2,901 | 3,031 | 4.5% |
| Inseparable non-agricultural activities | 1,496 | 1,681 | 12.3% |
The largest amendments on the costs side of the account were decreases in fertilisers and compound animal feed with an increase in straight animal feed. Revisions to 2021 animal feed accounts are due to a combination of revised usage data and trade figures, the revision in compound animal feed was a revision down of £256 million and the revision in straight animal feed was an increase of £120 million. The fertiliser market commentary which our estimate was based on predicted an increase in 2021 larger than results of the Farm Business Survey would indicate. This is possibly because there was a feed through of forward buying which meant that the volume of fertilisers used and thus reflected in the market commentary did not reflect the volume of fertiliser bought.
Table 4.8: Revisions larger than £100 million in inputs and costs (£ million)
| Item | Previous estimate for 2021 (Published May 2022) | Current estimate for 2021 (Published May 2023) | % change (from May 22 to May 23 estimate) |
|---|---|---|---|
| Fertilisers | 1,617 | 1,400 | -13.4% |
| Animal feed: compounds | 4,254 | 3,998 | -6.0% |
| Animal feed: straights | 1,658 | 1,778 | 7.2% |
As a result of more data becoming available over time there have also 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 further revisions that have been carried out since the last publication:
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There have been minor revisions to the value of most outputs and inputs for 2021, owing to additional data becoming available since the 2021 estimate was published. Primarily this is data from Wales and Northern Ireland.
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The wages for salaried managers as reported in the 2021/2022 were subject to several anomalous responses and so the wages for the 2020/2021 Farm Business Survey have been carried over so any changes to the value of compensation of employees is due to a change in numbers of workers
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Due to a corrected mistake there have been revisions to livestock slaughter and herd numbers for 2021. For more details of this revision see Monthly UK statistics on cattle, sheep and pig slaughter and meat production - statistics notice
Glossary of other key Terms
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Gross Value Added (GVA) is computed as Gross output minus intermediate consumption and represents that contribution of a business, sector or industry to Gross Domestic Product (GDP).
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Basic price is the market price plus directly paid subsidies that are linked to the production of specific products.
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Current price is the value based on prices observed during the reference year (i.e. values not adjusted for inflation). The alternative to current price is ‘real terms’.
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Real terms is where values from previous years have been adjusted for inflation. The alternative to real terms is ‘current price’.
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Intermediate consumption is the goods and services used as inputs in the productive process, e.g. feed, energy and fertilisers.
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Other costs includes other taxes on production, rent and interest paid.