Total Factor Productivity of the United Kingdom agricultural industry in 2022
Updated 25 May 2023
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This publication is available at https://www.gov.uk/government/statistics/total-factor-productivity-of-the-agricultural-industry/total-factor-productivity-of-the-united-kingdom-agricultural-industry-in-2022
This release presents the estimate of Total Factor Productivity (TFP) of the UK agricultural industry for 2022. It also presents volume indices for inputs and outputs. These figures include updates to the figures published in May of last year 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 2022 are published in parallel with these and can be found on GOV.UK.
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1. Key messages
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TFP is estimated to have increased by 3.4% between 2021 and 2022. This was driven by a decrease in the volume of all inputs which offset a very slight decrease in the volume of all outputs.
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The volume of all outputs decreased by <0.1%. 2022 saw an increase in total crop output of 1.7% whilst total livestock output decreased by 1.7%. The notable changes in crop output were an increase in oilseed rape (38.8%) and barley (11.5%), with decreases in sugar beet (-18.3%) and in ‘vegetables and horticultural products’ (-4.9%). All livestock outputs in 2022 changed by less than 4% up or down except for the output of eggs which fell by 21.4%.
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The volume of all inputs decreased by 3.3%. This decrease in the volume of inputs is the result of decreases across all input items in the account except veterinary expenses and labour, which saw small increases. The inputs that saw the largest percentage decreases were fertilisers (-12.8%), seeds (-12.0%) and animal feed (-6.7%).
Figure 1: Summary of key indices 2021 to 2022 (1973 = 100)
| Item | 2021 | 2022 |
|---|---|---|
| All outputs | 137.9 | 137.9 |
| All inputs | 85.2 | 82.4 |
| Total factor productivity | 161.8 | 167.3 |
2. Long term trends
Figure 2: Long term trend in TFP of the UK agricultural industry (1973 = 100)
TFP of the agricultural industry in the United Kingdom increased by 3.4% between 2021 and 2022. This was driven by a decrease in the volume of all inputs whilst the volume of all outputs decreased by <0.1%. 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 67.3%, driven by an increase in the volume of all outputs by 37.9% and a decrease in the volume of all inputs by 17.6%.
3. Annual changes, 2021 to 2022
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)(a)
| Item | 2021 | 2022 | Annual Change |
|---|---|---|---|
| Output of cereals | 175.5 | 183.8 | 4.7% |
| Output of industrial crops | 210.6 | 237.5 | 12.8% |
| Output of forage plants | 99.3 | 99.3 | 0.0% |
| Output of vegetables and horticultural products | 81.8 | 77.8 | -4.9% |
| Output of potatoes | 91.6 | 85.4 | -6.9% |
| Output of fruit | 123.2 | 132.8 | 7.8% |
| Output of other crop products | 126.9 | 120.0 | -5.4% |
| Total crop output | 141.9 | 144.3 | 1.7% |
| Output of livestock (meat) | 133.3 | 132.2 | -0.8% |
| Output of livestock products | 109.4 | 105.9 | -3.2% |
| Total livestock output | 123.5 | 121.4 | -1.7% |
| Inseparable non-agricultural activities | 600.5 | 635.0 | 5.7% |
| All outputs | 137.9 | 137.9 | 0.0% |
(a) 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.
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The largest percentage increase within total crop output was in industrial crops, which increased by 12.8%. This rise in industrial crops was primarily due to a 38.8% increase in the volume of oilseed rape produced, as a result of an 18.6% increase in the area grown and a 15.6% increase in average yield from 2021.
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The biggest change in total livestock output was in the output of livestock products, which decreased by 3.2%. This fall in the volume of livestock products was driven by a 21.8% decrease in the volume of production of eggs, which was impacted by Avian Influenza, high input costs and a sectoral shift away from intensive and towards free range/barn production systems.
3.2 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 2: Volume indices for inputs (1973 = 100)
| Item | 2021 | 2022 | Annual Change |
|---|---|---|---|
| Seeds | 115.7 | 101.9 | -12.0% |
| Energy | 49.1 | 48.1 | -2.1% |
| Fertilisers | 59.9 | 52.2 | -12.8% |
| Plant protection products | 299.5 | 298.4 | -0.4% |
| Veterinary expenses | 121.1 | 122.9 | 1.5% |
| Animal feed | 136.2 | 127.2 | -6.7% |
| Total maintenance | 57.8 | 54.1 | -6.3% |
| FISIM | 100.0 | 100.0 | 0.0% |
| Other goods and services | 129.9 | 127.6 | -1.8% |
| Intermediate consumption | 101.9 | 96.1 | -5.7% |
| Consumption of fixed capital | 123.0 | 122.9 | -0.1% |
| All labour | 51.2 | 51.2 | 0.1% |
| Land | 97.3 | 95.1 | -2.2% |
| All inputs and entrepreneurial labour | 85.2 | 82.4 | -3.3% |
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The volume of all inputs decreased by 3.3% between 2021 and 2022. As seen in Table 2, this decrease in the volume of inputs is the result of decreases across all of the individual items apart from veterinary expenses and labour in 2022.
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The largest percentage decrease in inputs was fertilisers, which decreased by 12.8%. The decrease in fertiliser seen in 2022 was the result of farmers cutting down on fertiliser usage in response to record high prices. Fertiliser production is energy intensive and the industry was heavily impacted by increasing natural gas prices, resulting in reduced domestic production and supply. The reduction in volume of 12.8% 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.
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The second largest decrease in inputs was in seeds which decreased by 12.0% from 2021, primarily in the cereals sector. Seed usage is driven by a combination of crop area, time of drilling, and drilling conditions. For crops planted in spring 2022, seed rates decreased as a result of good drilling conditions, which enabled crops to be sown during optimal time windows without needing to increase the seed rate. The area of spring 2022 crops also decreased from 2021 due to an increase in winter cropping (planted in autumn 2021), with a 13% reduction seen in the area of spring barley. Favourable weather conditions also led to a slight increase in winter crop areas in autumn 2022 from 2021.
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 | 2021 | 2022 | Annual Change |
|---|---|---|---|
| Productivity by intermediate consumption | 135.4 | 143.5 | 6.0% |
| Productivity by capital consumption | 112.1 | 112.2 | 0.1% |
| Productivity by labour | 269.4 | 269.0 | -0.1% |
| Productivity by land | 141.7 | 144.9 | 2.2% |
Figure 3: Long term trend 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: Tim Buttanshaw
Email: farmaccounts@defra.gov.uk
Telephone enquiries: 020 8026 3601
Media enquiries: 0345 051 8486
Public enquiries: 0845 601 3034
Horizon House
Deanery Road
Bristol
BS1 5AH
5.2 Revisions
This release represents the estimate for TFP 2022 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:
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The 2021 volumes for most outputs have been revised slightly, owing to additional data becoming available since the publication of the estimate for 2021 in May 2022
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The volume indices for poultry have been revised for 2021 following a review of the methodology for acquiring slaughter numbers
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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.
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The 2021 volume indices for inputs have been updated following incorporation of the latest available survey data, which has replaced market intelligence and forecast data that were previously used in production of the estimates. The most notable changes are decreases in fertiliser and plant protection products. These items saw larger changes due to manufacturing difficulties in the UK following the closure of factories due to the cost of production.
5.3 National statistics status
National Statistics status means that our statistics meet the highest standards of trustworthiness, quality and public value, and it is our responsibility to maintain compliance with these standards.
The continued designation of these statistics as National Statistics was confirmed in December 2017 following a compliance check by the Office for Statistics Regulation Total factor productivity of the UK agricultural industry.
The statistics last underwent a full assessment (Assessment Report 271 Statistics on Agriculture) against the Code of Practice for Statistics in 2014.
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.
For general enquiries about National Statistics, contact the National Statistics Public Enquiry Service:
Telephone: 0845 601 3034
Email: info@statistics.gov.uk
5.4 Background to TFP
These results are produced as part of the preparation of aggregate agricultural accounts UK National 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.
5.8 Future publications
The estimate of TFP of the UK agriculture industry in 2023 will be published in May 2024