Official Statistics

Total factor productivity for England by farm type: 1990/91 to 2023/24 - statistical notice

Updated 16 January 2025

Applies to England

This publication provides estimates of Total Factor Productivity (TFP) for England from 1990/91 to 2023/24 for selected farm types using the Farm Business Survey. Results for specialist pig, specialist poultry and horticulture farms have not been presented due to concerns about smaller sample sizes for these farm types, but they are included at the all farm level. Results are shown as an index, with the reference year, 1990/91, having an index of 100; for example, a category having an index of 140 in 2023/24 would mean that the TFP for that category was 40% higher in 2023/24 than it was in 1990/91.

Total Factor Productivity is a key measure of the economic performance of agriculture. It represents how efficiently the agricultural industry uses its available resources to turn inputs into outputs. The methodology used to calculate TFP for the UK agricultural industry has been applied to the England Farm Business Survey data to enable analysis by farm type.

While every effort has been made to comply with the standards in the Code of Practice for Statistics, it is important to note that these statistics have not yet been accredited by the Office for Statistics Regulation. The UK TFP statistics should continue to be used as the main source of data on agricultural productivity in the UK.

We would value user feedback on these statistics. Please send any feedback to fbs.queries@defra.gov.uk.

Key results

• Overall, Total Factor Productivity (TFP) for the agricultural industry in England decreased by 8% between 2022/23 and 2023/24.

• The change in TFP was driven by the volume of all inputs increasing by 5% and the volume of all outputs decreasing by 4%.

• In 2023/24, general cropping farms had the highest TFP with an index of 142, whereas lowland grazing livestock farms had the lowest, an index of 81.

• TFP fell in all farm types in 2023/24; the smallest decrease was in dairy farms, where inputs rose by 1% and outputs fell by 3%.

• The largest drop in TFP occurred in cereal farms; inputs for these farms rose by 27% while outputs fell by 1%.

1 Total Factor Productivity in England

Figure 1: Total Factor Productivity of agriculture in England, 1990/91 to 2023/24

Source: Defra, Farm Business Survey

Total Factor Productivity (TFP) for agriculture in England is estimated to have increased by 20% between 1990/91 and 2023/24, as shown in figure 1. This has been driven by outputs increasing by 2% and inputs decreasing by 15%. Up until 2005/06, TFP had been trending upward as volumes of inputs began to decrease. It has been more volatile in recent years, but despite this annual variability, the long term trend is still one of slow but overall improvement in TFP. This generally follows the trends seen in the UK TFP series.

Table 1: Average annual change in the volume of inputs, volume of outputs and Total Factor Productivity in England, 1990/91 to 2023/24

	1990/91 to 2000/01	2000/01 to 2010/11	2010/11 to 2020/21	2020/21 to 2023/24	1990/91 to 2023/24
All inputs	-1.6%	0.4%	0.0%	-0.9%	-0.4%
All outputs	-0.8%	0.9%	0.4%	0.1%	0.2%
Total factor productivity	0.8%	0.6%	0.4%	1.3%	0.7%

Source: Defra, Farm Business Survey

On average, TFP increased by 0.7% each year between 1990/91 and 2023/24. However, this change has not been consistent throughout the 33-year period. Between 2010/11 and 2020/21, TFP had an average annual increase of 0.4%, whereas between 2020/21 and 2023/24, the average year-on-year change was an increase of 1.3%.

Between 1990/91 and 2023/24, the volume of all inputs decreased by 0.4% on average each year, and the volume of all outputs, on average, increased by 0.2% each year.

Figure 2: Timeline of events affecting agriculture in England, 1990/91 to 2023/24

Source: Defra, Farm Business Survey

Figure 2 shows the TFP chart overlaid with a timeline of events which were relevant to the agricultural industry in England, and give context to the figures. Some events would have directly affected agricultural productivity, for example, animal disease outbreaks or extreme weather conditions, but other events may have indirectly affected agriculture by, for example, causing disruption or price fluctuations in the supply chain.

Some events were clustered, making it difficult to interpret the effect of each event individually. For example, the start of the Agricultural Transition coincided with the first year of the Covid-19 pandemic, so although there is a large fall in TFP it is not possible to say what exactly caused this. Additionally, some events affected some farm types more than others; for example, the Russian invasion of Ukraine increased grain prices while Avian Influenza mostly impacted poultry farms.

Figure 3: Total factor productivity of the agricultural industry in the UK and in England, 1990 to 2023

Source: Defra, Farm Business Survey and UK Total Factor Productivity

Figure 3 shows the England TFP in comparison to the UK series, which has been rebased to show 1990 as the comparison year. UK trends may appear different to those published in the UK TFP statistics release, because this uses a base year of 1973 for the indices.

Both the UK and England TFP series show similar trends over the time period. There are annual fluctuations in both series but the long-term trend shows a slow but steady overall improvement. The reasons for the slight differences between the two series include:

• The difference in geographic coverage.
• The UK series is based on a calendar year whilst the FBS is based on March to February years, meaning some expenditure and receipts will fall in different time periods.
• The FBS is based on a sample, and also has a threshold to exclude very small farms from the survey.

2 Total Factor Productivity by farm type

Figure 4: Total Factor Productivity for farms in England by farm type, 1990/91 to 2023/24

Source: Defra, Farm Business Survey

Figure note: Due to small sample sizes, results for specialist pig, specialist poultry and horticulture farms are not presented

Figure 4 shows that, in 2023/24, general cropping farms had the highest TFP, whereas lowland grazing livestock farms had the lowest. Between 2022/23 and 2023/24, TFP fell in all farm types. The smallest decrease, 3%, was in dairy farms, where inputs rose by 1% and outputs fell by 3%. The largest decrease, 22%, was in cereal farms; inputs for these farms rose by 27% while outputs fell by 1%.

Over the longer term, between 1990/91 and 2023/24, the TFP of general cropping, dairy and cereal farms have shown the highest increases in productivity. TFP in general cropping farms has had the largest rise across the farm types, increasing by 42%. This was driven by inputs halving and outputs decreasing by 27% overall.

Both LFA grazing livestock and mixed farms had a similar TFP in 2023/24 to their 1990/91 level. The only overall drop in TFP over the whole time period was seen in lowland grazing livestock farms, whose TFP decreased by 19%. This was driven by inputs decreasing by 25% and outputs decreasing by 40%.

3 What you need to know about this release

3.1 Contact details

Responsible statistician: Cat Hand

Public enquiries: fbs.queries@defra.gov.uk

For media queries between 9am and 6pm on weekdays:

Telephone: 0330 041 6560

Email: newsdesk@defra.gov.uk

3.2 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.

We invite users to make contact to advise us of the use they do, or might, make of these statistics, and what their wishes are in terms of engagement. Feedback on this statistical release and enquiries about these statistics are also welcome.

3.3 Survey content, methodology and data uses

The Farm Business Survey is an annual survey providing information on the financial position, physical characteristics, and economic performance of farm businesses in England. The sample of farm businesses covers all regions of England and all types of farming.

Data for the Farm Business Survey are collected through face-to-face interviews with farmers, conducted by highly trained research officers.

The data are widely used by the industry for benchmarking and inform wider research into the economic performance of the agricultural industry, as well as for evaluating and monitoring current policies. The data will also help to monitor farm businesses throughout the Agricultural Transition period.

3.4 Availability of results

All Defra statistical notices can be viewed on the Statistics at Defra page.

More publications and results from the Farm Business Survey are available on the Farm Business Survey Collection page.

4 Technical note

4.1 Survey coverage and weighting

The Farm Business Survey only includes farm businesses with a Standard Output of at least 25 thousand Euros (approximately £21 thousand), based on activity recorded in the previous June Survey of Agriculture and Horticulture. In 2023/24, the sample of 1,373 farms represented approximately 51,300 farm businesses in England.

Initial weights are applied to the Farm Business Survey records based on the inverse sampling fraction for each design stratum (farm type and farm size). Dataset table from the Farm Accounts in England publication shows the distribution of the sample compared with the distribution of businesses from the 2023 June Survey of Agriculture. These initial weights are then adjusted, using calibration weighting, so that they can produce unbiased estimates of a number of different target variables. More detailed information about the Farm Business Survey can be found on the technical notes and guidance page. This includes information on the data collected, information on calibration weighting and definitions used within the Farm Business Survey.

4.2 Farm type classification

From 2023/24, the classification of farms is based on 2017 Standard Output (SO) coefficients. TFP values for 2022/23 have been recalculated and presented in this release to allow comparability between 2022/23 and 2023/24. More details on the impact of the SO change can be found on the FBS technical notes and guidance page.

4.3 Methodology for calculating Total Factor Productivity

Total Factor Productivity (TFP) is a measure of how efficiently the agricultural industry turns inputs into outputs. Inputs are land, labour, capital expenditure and purchases. Outputs are sales from the farm, however, transactions within the industry (for example, lambs and cattle being sold for onward fattening or straw sold as bedding) and support payments are excluded. The volumes of all inputs and outputs are weighted by price.

Total Factor Productivity = Volume of total outputs / Volume of total inputs

Partial Factor Productivity is not discussed in this statistical commentary, however, data are included in the publication tables. Partial Factor Productivity measures how efficiently intermediate consumption, capital, labour and land are transformed into outputs, and thus serves to break down Total Factor Productivity into the productivity by each input. It takes into account the development in other inputs, for instance, if farms start using more capital that allows labour to be used more effectively, this will result in an increase in the Partial Factor Productivity by labour.

Partial Factor Productivity = Volume of total outputs / Volume of input component

Results are measured in terms of the trend in volume of output leaving the industry per unit of all inputs, including labour. Changes from year to year are often shaped by factors outside the control of farmers, such as weather, disease, policy interventions and general economic conditions, and are rarely the main driving factor behind long-term changes in farm incomes. However, over a longer period, improvement of productivity is one of the major factors that increases income.

4.4 Limitations of the sector-level TFP measure

There has been considerable interest in calculating TFP for each farm type, also known as a sector. A sector-level TFP measure enables comparison of trends in productivity across sectors and shows how productivity varies over time within a sector. Some of the data sources used to produce aggregate values and volumes for TFP at the UK level do not allow for the provision of sector-level breakdown. Therefore, the Farm Business Survey has been used to produce a TFP series for each farming sector for England, using the same methodology as for the UK National Statistics, TFP for the UK agricultural industry.

Adapting the FBS data to fit the UK TFP method has resulted in several difficulties and limitations. Firstly, the design of the FBS means that not all of the UK-level items are available in the data. To rectify this, some FBS items have been combined to match the UK definition, whilst some of the smaller items, such as work in progress, have been grouped to avoid negative values. Some items also had different definitions in the FBS and the UK data, for example, capital consumption (also known as depreciation).

The FBS is a sample survey of commercial farms. Any farm in England which does not meet the typology and entry threshold criteria for the FBS is excluded from the survey population. Whilst the survey currently accounts for around 60% of farm businesses in England, these businesses are estimated to account for 98% of output, and more than 90% of agricultural land. The FBS has had several changes in typology methodology and entry threshold criteria since 1990; the most notable being in 2009/10. The method used to type farms changed from using Standard Gross Margins and the entry criteria changed from a threshold of at least 0.5 Standard Labour Requirement. From 2009/10, farms are typed based on Standard Outputs and the entry threshold is at least 25 thousand Euros (approximately £21 thousand) of Standard Output. Full details can be found in the Farm classification in the United Kingdom document on the FBS technical notes and guidance page.