1 PURPOSE, SAMPLE AND METHODS
1.8 Definitions and explanation of terms
Agricultural land: The areas occupied by different crops are registered in decares.
1 decare = 0.1 hectare. Areas of uncultivated and surface-cultivated meadow are reduced by the area considered to be unproductive. Shares of cultivated common pasture are considered to be part of the holding. The agricultural area includes both own and rented land. The number of decares of rented land is recorded.
Assets: See fixed assets and current assets.
The balance sheet is a statement of the family’s total assets, liabilities and own capital on 31 December.
Capacity to pay (calculated for agriculture only) shows the return on total labour input. It is given in NOK per holding or per hour.
The percentage capacity to pay (calculated for agriculture only) shows the achieved return on total labour input as a percentage of total labour costs, when total labour costs include tariff wages for the family.
Capitalization thresholds: Fixed assets are capitalized if their cost price is at least NOK 15,000, in management accounts as in tax accounts. In tax accounts merely improvement of standard is capitalized as concerns major repairs and maintenance work. Management accounts often let a larger share of such work be capitalized and then depreciated (or cost allocated) over a determined period of time.
The closing balance is the balance at the end of the financial year.
Costs are the value of goods and services used in production during the financial year.
Crops: The quantities recorded are storable crops. Cereal quantities are measured by kg and refer to 15 per cent water content. Root crops, potatoes and hay are also measured by kg, while silage quantities are recorded either by kg or by m3. Grazing is quantified in terms of FUm, which is also the case for fresh harvested grass and green fodder. All crops are finally converted into FUm per decare.
Current assets are assets that are not acquired for permanent ownership or use, and that have longevity of less than one year. Current assets are linked to short term sales of goods and services. Examples of current assets are bank deposits, cash, other claims, animals for slaughter and stocks.
The debt ratio presents the family’s debts expressed as a percentage of their total capital. In other words the debt ratio expresses the share of family assets financed by loan capital.
Depreciation is defined as the planned distribution of assets’ value reduction throughout the expected asset lifetime. This reduction may be a result of wear and tear, age or obsolescence.
Tax accounts apply the principle of reducing balance depreciation for most de-preciable assets. This means that a certain percentage of the asset’s book value is depreciated each year. Consequently the annual depreciation drops year by year.
Depreciable assets are divided into various groups. Buildings and installations are treated individually, while fixtures, equipment and machinery are treated collec-tively.
Management accounts use linear depreciation, which means depreciation by the same amount each year. Depreciable assets are treated individually, and the depreciation period is determined by expected asset lifetime. For example second-hand equipment will be depreciated over a shorter period than what is the case for new equipment.
The depreciation rates for various types of assets in both tax accounts and mana-gement accounts are shown in Table 1.1.
The family consists of the farmer and spouse or partner (if any), and any children aged under 17.
Family labour income (calculated for agriculture only) is found by deducting the required rate of return on agricultural assets from the net farm income. When calcu-lating family labour income per man-year, hours of unpaid hired labour and hours worked by the family are merged. The average of opening and closing balances gives the value of agricultural assets.
Family payment for labour is the imputed value of family labour input. The calculations are based on expected costs of hiring corresponding labour at standard wages (holiday allowances and payment for public holidays included). Employer’s national insurance contributions, which vary from one region to another, are also included in the calculations. Thus the hourly pay varies from one region to another.
The farmer is the person administratively responsible for the holding. He or she is normally the owner of all, or part of, the real property. Generally the farmer is the person who works the most hours on the holding.
Farm-independent occupations are enterprises that are carried out by farmers, without involving the farm resources.
Fixed assets are assets with a planned life of more than one year. All assets, except current ones, are fixed. Agricultural land and forest, outbuildings, machinery and breeding livestock exemplify fixed assets.
Fixed costs are costs which, during a certain period, do not vary significantly with the produced quantities. Examples are depreciation and maintenance of out-buildings.
The gross margin is defined as output minus variable costs.
A holding is an operating unit in agriculture. It may consist of both own and rented land.
Investment frequency (calculated for forestry only) shows the percentage of forests where investments have been made during the account year.
Table 1.1 Capitalization and depreciation in tax accounts and management accounts
Assets Tax accounts Management accounts
Agricultural and forestry areas Capitalization without depreciation Capitalization without depreciation
Farm roads Capitalization without depreciation Capitalization without depreciation Forestry roads Direct charge-offs Capitalization without depreciation Forestry tracks Direct charge-offs Linear depreciation, max. 10 years Cultivation of new land Direct charge-offs Capitalization without depreciation Levelling agricultural land Cost allocation over 10 years Capitalization without depreciation Orchards Capitalization without depreciation Direct charge offs
Ditches, piped Direct charge-offs Linear depreciation, 20 years Ditches, open Capitalization without depreciation Capitalization without depreciation Irrigation equipment, portable Reducing balance depreciation,
max. 20 %. Treated collectively Linear depreciation, 10 years Irrigation equipment, permanent, including
pumps Reducing balance depreciation, max. 8 %.
Treated individually Linear depreciation, 20 years Water conduit Reducing balance depreciation, max. 4 %.
Treated individually Linear depreciation, 20 years Outbuildings
Expected life >20 years Reducing balance depreciation, max. 4 %.
Treated individually Linear depreciation, 30 years Expected life < 20 years
(fur farms and greenhouses) Reducing balance depreciation, max. 8 %.
Treated individually Linear depreciation, 15 years Fixtures in outbuildings Reducing balance depreciation,
max. 20 %. Treated collectively Linear depreciation, 10 years Machinery and equipment Reducing balance depreciation,
max. 20 %. Treated collectively Linear depreciation, 10 years Vans and lorries Reducing balance depreciation,
max. 20 %. Treated collectively Linear depreciation, 10 years
Breeding livestock Treated as current assets Capitalized according to slaughter value Stocks of farm products for sale Production value, standard unit prices Estimated sales value, prices at the end of
the year Stocks of purchased goods Purchased price Purchased price Stocks of fodder grown on the holding Production value, standard unit prices Valued as fodder
Forestry plan Linear depreciation, 10 years Linear depreciation, 10 years Farmhouses Capitalization without depreciation Linear depreciation, 50 years Private vehicle Depreciation varies with age of vehicle Linear depreciation, 10 years
Joint operations are management units where outbuildings, agricultural areas and milk quotas belonging to two or more farms are joined and operated by mutual labour. In this report the term is used only for units with a certain degree of equality between the partners.
Labour, executed by family and hired workers, is recorded by hours. For persons aged under 18 or over 65, hours actually worked are converted into standard hours, according to the following table:
Age Multiplication factor
12–14 years 0.6
15–16 years 0.8
17 years 0.9
66–70 years 0.9
over 70 years 0.7
Agricultural or forestry labour provided by previous owners, or by own children aged over 17, is recorded as hired labour in management accounts. Hired labour is split up into two categories: Paid and unpaid. Unpaid hired labour is given a zero value. An imputed value for family labour connected to investments is recorded separately and is object to capitalization. Family labour input in agriculture, forestry and other gainful activities is recorded by the survey participants.
In tax accounts livestock is classified as current assets and is given a value according to standardized variable rearing and breeding costs (production value).
Management accounts in general present break-up values for livestock. Laying hens, piglets and horses are exceptions. Management accounts classify cattle for slaughter, piglets, pigs for slaughter and poultry for slaughter as current assets. The rest of the livestock is classified as fixed assets (breeding animals). Both tax accounts and management accounts let animals keep the value they once received as grown-ups in the balance sheet.
Long-term liabilities normally have a date of payment which lies one year or more ahead of the closing of accounts. These liabilities are not directly linked to the holding’s short-term sales of goods and services.
A man-year is defined to be 1,845 registered hours of labour.
Net conversion return is the output from timber sales minus variable costs, including the imputed value of family labour, but excluding the costs of silviculture.
Variable costs include all labour (executed by family and hired workers), rental and maintenance of equipment, fuel, selling costs etc. Depreciation of own equipment is not included.
Net income is output minus costs and expresses what the family receives as payment for own labour and for own and borrowed capital.
Net investments are gross investments minus depreciation, sales and investment grants.
Net mechanization costs include all costs related to machinery (tractors, harvesters, farm cars and other machinery and equipment), including interest, minus income from hiring out machinery:
Depreciation and maintenance + Fuel costs
+ Cost of rented machinery and equipment + Required return on capital
= Total mechanization costs – Income, hiring out machinery
= Net mechanization costs
NOK is the monetary unit in Norway. In 2013 NOK 1,000 were USD 169, or Euro 128.
The opening balance is the balance at the beginning of the financial year.
Other gainful activities are enterprises that involve the holding’s resources (for instance area, buildings or machinery) for other purposes than ordinary agriculture or forestry.
Output is the value of the goods and services produced during the year. Output includes sales, consumption and changes in stocks.
Own capital is the value of total assets minus total debt.
The percentage cut is the total roundwood cut expressed as a percentage of the sustainable yield.
Productive forest: All forest land where productivity exceeds the minimum value of a scale of site quality classes.
Return on labour and own capital (calculated for agriculture only) is net farm income plus the costs of hired labour minus the share of interest on debt and
payments to previous owners assigned to agriculture. This share is equal to the value of agricultural assets as a percentage of total assets.
Return on family labour and own capital (calculated for agriculture only) shows net farm income minus the share of interest on debt and payments to previous owners assigned to agriculture. This share is equal to the value of agricultural assets as a percentage of total assets.
The required return on agricultural assets is the calculated interest on the average value of agricultural assets.
Root value is the difference between the sales’ price for timber and the logging costs.
Sales of capitalized fixed assets are handled differently in management accounts compared to tax accounts. Tax accounts present accrual profits or losses from sales of both non-depreciable fixed assets and assets which are depreciated individually.
When handling fixed assets that are depreciated collectively, profit or loss can not be determined, and the total sales’ price is written down in the appropriate asset group.
In management accounts, profits from sales are written down, and losses from sales are depreciated. If agricultural land or forest is sold off, the recorded value of the area sold is written down to zero in management accounts. Any remaining part after down-writing is recorded as extraordinary items.
Savings are any increase in own capital during the year.
Short-term liabilities normally have a date of payment which lies less than one year ahead of the closing of accounts. Short-time liabilities may be directly linked to the holding’s short-term sales of goods and services.
Standard output is standardized output from a production, calculated without grants. The selection of FADN is now based on standard output.
The sustainable yield is the largest amount of timber, measured by m3 without bark, that can be logged each year in a forest without reducing future yields.
Tax-adjusted return on labour and own capital. The 2013 income effect of Farmer’s allowance is determined by a 28 per cent tax reduction and an assumed marginal rate of taxation of 39 per cent (as done by the Budget Committee for Agriculture). The income effect (which is also called the tax adjustment) makes 45.9 per cent of Farmer’s allowance and is added to the return on labour and own capital.
Total net income is the net income from all occupations, together with wages, pensions, any imputed value for family labour and interest earnings. Interest charges and payments to previous owners are deducted.
Unpaid, hired labour: Management accounts record unpaid, hired labour by number of hours worked. This labour is often executed by close relatives.
Valuation: Both management accounts and tax accounts use the historical cost when giving value to fixed assets in the balance sheet. Grants are deducted. If the farmer’s family has been executing labour connected to investments, management accounts give this labour an imputed value which is added to the cost price. Tax accounts do not record any labour value in these cases.
In tax accounts, as distinct from management accounts, fixed assets of forestry are written down by contributions received from the Forest Trust Fund. Stocks of purchased goods are valued by purchase price plus freight charges, no matter which of the two kinds of accounts we are looking at. Tax accounts value stocks of farm products by standard unit prices and thereby estimate production values, for both agricultural and forestry products. Management accounts value farm products for sale by estimated sales values at 31 December. Fodder grown on the holding is
fodder have values corresponding to their feed concentration. The valuation of animals for slaughter is described under the heading livestock.
Variable costs are costs that, during a given period, vary with production size. Costs concerning seed, fertilizer and fodder may be mentioned as examples. Fuel costs are considered to be fixed.
Working capital is defined as current assets minus short-term liabilities and measures liquidity.
Hovudtabellar Main tables
Hovudtabellane ligg også ute på heimesidene til NILF:
http://www.nilf.no/Driftsgranskinger/Bm/Driftsgranskinger.shtml The main tables are also available at our homepages:
http://www.nilf.no/Engelsk/Driftsgranskinger.shtml
Driftsgranskingar i jordbruket 2013 Account statistics for agriculture 2013
Hovudtabell 1 Bruksstorleik,dekar. Alder på brukar
Size of holdings, decares.1) Farmer's age
Regionar Regions Storleiks- Tal Jordbruksareal, daa Bortleigd Alder på grupper, daa bruk Agricultural area, decares areal, daa brukar
Farm size, Num .of Totalt Leigd Fulldyrka Area rented Farmer's
Regionar Regions Storleiks- Tal Jordbruksareal, dekar Bortleigd Alder på grupper, daa bruk Agricultural area, decares areal, daa brukar
Farm size, Num. of Totalt Leigd Fulldyrka Area rented Farmer's
decares holdings Total Rented Cultivated out, decares age
Nord-Noreg Northern Norway 0 - 49,9
50- 99,9 2 73 41 73 52
100-199,9 20 151 53 133 47
200-299,9 28 246 98 206 54
300-499,9 42 393 215 345 47
500- 17 674 383 580 46
Alle All 109 349 178 302 49
Alle bruk All holdings 0 - 49,9 23 23 2 22 53 53
50- 99,9 38 75 15 66 8 52
100-199,9 172 156 41 130 51
200-299,9 211 246 75 204 2 50
300-499,9 291 389 170 319 1 48
500- 153 750 384 651 2 48
Alle All 888 349 149 294 3 49
Driftsgranskingar i jordbruket 2013 Account statistics for agriculture 2013
Hovudtabell 2 Bruk av jordbruksarealet, dekar
Use of agricultural area, decares
Regionar Regions Storleiks- Bygg Havre Kveite Oljefrø, erter, Grasfrø Poteter grupper, daa anna korn o.l.
Agder og Rogaland 100-199,9 17
Jæren 200-299,9 14 1 1
Nord-Noreg Northern Norway 100-199,9 1
200-299,9 1
Eng og beite Grønsaker Frukt og bær Brakk I alt
Grass and Vegetables Fruits and Fallow Total
pasture berries
Driftsgranskingar i jordbruket 2013 Account statistics for agriculture 2013
Hovudtabell 3 Avling, kg per dekar
Crop yields, kg per decare
Regionar Regions Storleiks- Bygg Havre Kveite Oljefrø Grasfrø Poteter grupper, daa
Agder og Rogaland 100-199,9 373
Jæren 200-299,9 423 136 4 000
Andre bygder Other regions 300-499,9 328 500- 365
Alle All 321 1 050
Nord-Noreg Northern Norway 100-199,9 1 567
200-299,9 1 137
Driftsgranskingar i jordbruket 2013 Account statistics for agriculture 2013
Hovudtabell 4 Avling, FEm per dekar
Crop yields, FUm per decare
Regionar Regions Storleiks- Korn inkl. Rotvekster Grønnfôr Eng og Grovfôr Avling grupper, daa halm beite i alt i alt Farm size, Cereals Root crops Green Grass and Total coarse Total crops
decares inc. straw fodder pasture fodder crops
Nord-Noreg Northern Norway 100-199,9 252 252 252
200-299,9 272 272 272
Driftsgranskingar i jordbruket 2013 Account statistics for agriculture 2013
Hovudtabell 5 Storleik på buskapen, gjennomsnitt per bruk
Numbers of livestock per holding
Regionar Regions Storleiks- Kyr Kviger og Oksar Grisar Pigs Sauer Geiter Fjørfe grupper, daa kalvar >1år Avlssvin A. > 2 mnd
Driftsgranskingar i jordbruket 2013 Account statistics for agriculture 2013
Hovudtabell 6 Husdyrproduksjon Livestock production
Regionar Regions Storleiks- Kumjølk Mjølk, Storfekjøt, Svinekjøt, grupper, daa l omsett kg/årsku kg omsett kg omsett
Salbare Gagnslam/ Kjøt, kg/ Geitemjølk, Mjølk, kg/ Egg,
Driftsgranskingar i jordbruket 2013 Account statistics for agriculture 2013
Hovudtabell 7 Arbeidsforbruk per bruk, fullverdige timar Labour input, hours per holding
Regionar Regionar Storleiks- Jordbruk Agriculture grupper, daa Ubet. leigd arb. Bet. l. arb. Brukar Ektefelle Familien
ellers Familien i
alt Arbeid i alt Fam.arb. Årsverk à Farm size, Unpaid hired Paid hired Farmer Spouse Other
family Total family Total
Skogbruk Forestry Nyanlegg Investments Familiens arbeidsvederlag Brukar Ektefelle Familien elles Brukar Ektefelle Familien elles Family labour imputed value
Farmer Spouse Other family Farmer Spouse Other family Jordbruk Skogbruk Nyanlegg
Agriculture Forestry Investments
Driftsgranskingar i jordbruket 2013 Account statistics for agriculture 2013
Hovudtabell 8 Oppnådde prisar på garden, kroner per kg/l/stk.
Prices at farm gate, NOK per kg/ l /animal
Regionar Regions Storleiks- Bygg Havre Kveite Poteter Kumjølk
grupper, daa per l
Nord-Noreg Northern Norway 100-199,9 12,01 4,82
200-299,9 11,14 4,70
Driftsgranskingar i jordbruket 2013 Account statistics for agriculture 2013
Hovudtabell 9 Eigedelar i jordbruket 31.12, 1000 kroner per bruk Agricultural assets on 31 December, NOK 1000 per holding
Regionar Regions Storleiks- Avlingslager etc. Harvested crops etc. in stock
grupper Bygg Havre Kveite Poteter Grønsaker Ull Anna I alt
Nord-Noreg Northern Norway 100-199,9 0,4 0,6 0,9
200-299,9 4,3 2,5 6,8
Produksjonsmiddel Means of production
Innkjøpte Grovfôr Handels- Anna I alt fôrmiddel Coarse gjødsel
Purchased fodder fodder Fertilizer Other Total
4,2 10,3 11,1 14,8 40,5
Driftsgranskingar i jordbruket 2013 Account statistics for agriculture 2013
Hovudtabell 9 Forts. Cont. Eigedelar i jordbruket 31.12, 1000 kroner per bruk Agricultural assets on 31 December, NOK 1000 per holding
Regionar Regions Storleiks- Husdyr Livestock
grupper, daa Storfe Grisar Sauer Geiter Fjørfe Andre I alt
Anleggsmiddel Fixed assets Eigedelar i alt Mask., reisk. Traktor Skurtreskar Yrkesbil Driftsbygningar Vassanlegg Grøfter Jord etc. I alt i jordbruket Total Mach., equip. Tractor Comb. harv. Farm car Outbuildings Water supply Drainage Farmland etc. Total assets agric.
134,3 120,9 68,7 17,3 925,3 7,7 5,5 321,3 1 600,9 1 720,3
Driftsgranskingar i jordbruket 2013 Account statistics for agriculture 2013
Hovudtabell 10 Nyanlegg, avskrivingar, sal, tilskot Investments, depreciation, sales, grants
Regionar Regions Storleiks- Maskinar, reiskapar Traktor Yrkesbil, skurtreskar grupper, daa Machinery, equipment Tractor Farm car, comb. harvester Farm size, Nyanl. Avskriv. Sal/tilskot Nyanl. Avskriv. Sal/tilskot Nyanl. Avskriv. Sal/tilskot
decares Invest. Deprec. Sales/grants Invest. Deprec. Sales/grants Invest. Deprec. Sales/grants
Austlandet Eastern Norway 100-199,9 40,3 16,9 10,9 18,9 0,2 8,5 0,3
og nettoinvestering i jordbruket, 1000 kroner per bruk and net investment in agriculture, NOK 1000 per holding
Driftsbygningar Grøfter, vassanlegg Jord, mjølkekvote etc. I alt Netto
Outbuildings Drainage, water supply Farmlands, milk quota etc. Total investering
Nyanl. Avskriv. Salg/tilsk. Nyanl. Avskriv. Salg/tilsk. Nyanl. Salg/tilsk. Nyanl. Avskriv. Salg/tilsk. Net Invest. Deprec. Sales/grants Invest. Deprec. Sales/grants Invest. Sales/grants Invest. Deprec. Sales/grants investment
307,8 57,6 80,5 1,4 1,3 349,5 104,0 91,9 153,6
Driftsgranskingar i jordbruket 2013 Account statistics for agriculture 2013
Hovudtabell 11 Nyanlegg, avskrivingar, sal, tilskot og nettoinvestering i
Hovudtabell 11 Nyanlegg, avskrivingar, sal, tilskot og nettoinvestering i