| APPENDIX |
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| PART I
- CLASSIFICATION OF FARMS |
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1.
Type of Farm
The classification is based on detailed sub-types as
defined in the EC farm typology, which have been grouped
together where required to give the types shown below.
These groupings were revised in 1993 , throughout the
United Kingdom such that types are now comparable between
countries. |
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| The
classification is based on the relative importance of the
various crop and livestock enterprises on each farm
assessed in terms of standard gross margin (an economic
measure of output less variable costs). The method of
classifying each farm is to multiply the area of each
crop (other than forage) and the average number of each
category of livestock by the appropriate standard gross
margin, the proportions of the total contributed by the
various enterprises determining the type of farm. The
list below defines the main types that are dealt with in
this booklet. |
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| Type |
Definition |
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| Specialist Sheep (LFA) |
Farms in the less-favoured areas with more
than two-thirds of the total standard gross margin coming
from sheep. |
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| Specialist Beef (LFA) |
Farms in the less-favoured areas with more
than two-thirds of the total standard gross margin coming
from cattle. |
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| Cattle and Sheep (LFA) |
Farms in the less-favoured areas with more
than two-thirds of the total standard gross margin coming
from sheep and beef cattle together. |
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| Lowground Cattle and Sheep |
Farms NOT in the less-favoured areas with
more than two-thirds of the total standard gross margin
coming from sheep and beef cattle together. |
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| Cereals |
Farms where more than two-thirds of the
total standard gross margin comes from cereals and
oilseeds. |
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| General Cropping |
Other farms where more than two-thirds of
the total standard gross margin comes from all crops. |
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| Dairy |
Farms where more than two-thirds of the
total standard gross margin comes from dairy cows. |
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| Mixed |
Farms where no enterprise contributes more
than two-thirds of the total standard gross margin. |
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| 2.
Standard Gross Margin |
| The
gross margin of an enterprise is its enterprise output
less its variable costs. Enterprise output is revenue
adjusted for valuation change, plus transfers out and the
value of produce used, less transfers in and purchases.
Variable costs are those which can be readily allocated
to an enterprise and also vary with changes in the scale
of that enterprise. Standard gross margin is the Scottish
average for the years 1987 to 1989. |
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| 3.
Size of Business |
| This
is defined in terms of total standard gross margin
(average value 1987 to 1989), with 1,200 ECU (European
currency units) of standard gross margin corresponding to
one ESU (European Size Unit). The size groups are: |
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| Small |
8 - 39.9.9 ESU |
-
this represents approximately the one man farm. |
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|
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| Medium
|
40 - 99.9 ESU |
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this represents approximately the two to three man farm. |
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| Large |
100 - 199.9 ESU |
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this represents approximately the farms with more than
three men. |
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| On
Cereals, General Cropping and Mixed farms the large size
group is defined as 100 ESUs and over. |
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| Where
figures for All Sizes are shown, these refer to the above
groups weighted together. |
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| 4.
Weighted Averages |
| The
figures for All Sizes are weighted averages based on the
1997 census distribution of agricultural holdings in
Scotland by type of farming and size of business. |
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| PART II - ACCOUNTING TERMS |
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| Only
some of the items making up output and input are shown
separately in the tables, but each is defined to show
what is comprised in the totals. |
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| Crop
Output |
| Sales,
including produce to farmhouse and labour, adjusted for
debtors at the beginning and end of year and for
valuation change. The value of non-fodder crops used on
the farm for feed or seed is included. |
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| Cereals |
| Wheat,
barley, oats and mixed corn. |
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| Livestock
Output |
| Sales,
including guarantee payments and produce to farmhouse and
labour, adjusted for debtors at the beginning and the end
of year and for valuation change, plus Hill Livestock
Compensatory Allowances, Suckler Cow Premium and Sheep
Annual Premium, Beef Special Premium, LESS purchases of
livestock and livestock products for resale. The value is
included of milk from the dairy herd fed to stock.
Breeding Livestock Stock Appreciation is excluded. |
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| Miscellaneous
Output |
| Miscellaneous
produce to farmhouse and labour, revenue from contracting
and some other miscellaneous items, but excluding grants
and subsidies, adjusted for valuation change. |
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| Other
Grants and Subsidies |
| All
grants except those paid in respect of permanent
improvements, those deducted from expenditure, and those
included in Livestock Output. |
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| Total
Output |
| Crop
Output, Livestock Output, Miscellaneous Output, and other
Grants and Subsidies. |
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| Inputs |
| Payments
and non-cash inputs (eg unpaid labour, rental value),
adjusted for creditors at the beginning and end of the
year and for valuation change. |
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| Feeds |
| Expenditure
on feeds adjusted for valuation change. The value is
included of (a) milk from the dairy herd fed to stock,
and (b) home-grown non-fodder crops fed to stock. |
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| Seeds |
| Expenditure
on seeds adjusted for valuation change. The value of
home-grown seed grain and potatoes is included. |
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| Labour |
| Wages
and employer's National Insurance contributions, payments
in kind, value of unpaid family labour (excluding that of
the farmer and spouse), salaried management. |
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| Fertilisers |
| Expenditure
on lime and fertilisers, adjusted for valuation change. |
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| Machinery
( excl Depreciation ) |
| Expenditure
on machinery repairs, small tools, contract work, and
fuel and oil, LESS allowances for private use. |
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| Miscellaneous |
| Electricity,
haulage, miscellaneous items such as veterinary charges,
crop protection, twine and wire, vehicle taxes and
insurance, adjusted for valuation change. |
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| Land
and Building Costs |
| Rent
paid by tenants, rental value of owner-occupied farms,
imputed rent of tenant's improvements. Rates paid on
cottages and the business share of the farmhouse. Repairs
by occupiers. |
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| Depreciation |
| This
is calculated on a replacement cost basis. |
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| Net
Farm Income |
| Total
Output less Inputs. Breeding Livestock Stock Appreciation
is excluded. This represents the return to the farmer and
spouse for their manual and managerial labour and to the
tenant type assets they have invested in the business. |
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| Breeding
Livestock Stock Appreciation |
| The
part of the change in the value of breeding livestock
which is due to changes in price. It is calculated in
relation to adult female cattle, sheep and pigs. |
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| Tenant's
Capital |
| Investment
in tenant-type assets on a medium or short-term basis.
The first comprises machinery (replacement cost basis)
and breeding livestock, and is valued at the average of
opening and closing valuations. The second comprises
trading livestock, crops and other items similarly
valued. As investment varies between opening and closing
valuations, an average annual investment has been
estimated. |
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| PART III - BALANCE SHEETS AND FLOW OF
FUNDS |
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| Balance
Sheets |
| The
figures presented in the tables are weighted averages
based on the 1997 census distribution of holdings by
tenure category, type of farming and size of business. |
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| The
balance sheets relate to the business rather than the
farmer and therefore any other assets belonging to the
latter are excluded. |
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| For
land and buildings, crops and livestock, the basis of
valuation is conservative market price, while for
machinery and equipment it is depreciated replacement
cost. Particularly in the case of land and buildings, the
balance sheet entries need to be treated with some
reserve in respect both of the absolute level and of the
year to year trend, and it follows that this caveat
extends to dependent figures such as net worth. |
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| Flow
of Funds |
| The
figures presented are for the same sample of farms as are
used in the balance sheet analysis and are weighted in
the same way. |
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| Net
farm income is shown exclusive of breeding livestock
stock appreciation. Inputs not involving cash outlay are
imputed charges (eg the rental value of owner-occupied
land) and depreciation of plant and machinery, less
valuation changes for livestock, crops etc. Interest
relates only to borrowings for farming purposes including
those for the purchase of farms or parcels of land. Net
investment spending is expenditure on land, buildings,
improvements, plant and machinery, less sales and capital
grants. Cash from non-farming sources represents funds of
various kinds from outside the farming business including
capital introduced less capital withdrawn. Increase in
borrowing indicates the net change in the external credit
position of the farm business, being the increase in
external liabilities less any increase in liquid assets. |
