COSTS IN AGRICULTURE DOSSIER FORMACIÓ I ASSESSORAMENT AL SECTOR AGROALIMENTARI 69 COSTS IN AGRICULTURE P03 The farming accountancy network in catalonia, an instrument for monitoring and assessing the sector P07 Assessment of production costs of large dryland farms P19 Economic comparison of various wine- April 2014 growing regions. Year 2011 P28 The interview www.ruralcat.net www.gencat.cat/agricultura 1 N69 DOSSIER DOSSIERTÈCNIC PRESENTATION plies. Not only knowing how and what species Dossier Tècnic. Núm. 69 or varieties should be sown or planted, but also “Costs in agriculture”. April 2014 assessing the costs (fixed, variable, external, Published by internal, etc.) that their selection entails. Finally, Directorate-General for Food, Quality and Agrifood Industries it is clear that the viability and profitability of an Editorial Board agricultural enterprise is the result of the cohe- Domènec Vila Navarra, Jaume Sió Torres, Joan Gòdia sion of economic and agronomic knowledge. Tresanchez, Xavier Clopès Alemany, Ignasi Rodríguez Galindo, Joaquim Xifra Triadú, Agustí Fonts Cavestany (IRTA), Montserrat Alomà Masana, Mireia Medina Sala, The information that the producer may have Àngela Seira Sanmartin, Joan S. Minguet Pla and Josep M. Masses Tarragó. Bibiana Domingo Barbena is another factor to consider. This high-quality Coordinated by Secretary-General of the Ministry of Agriculture, information is based on the collection of the Livestock, Fisheries, Food and Natural Environment Josep Maria Masses Tarragó. prices and costs of various production factors Produced by in different parts of Catalonia provided for rural Teresa Boncompte Ribera, Josep Maria Masses Tarragó and Annabel Teixidó Martínez. entrepreneurs by the Ministry, and obtained by Translated by the Accounting Network of Catalonia – a tool for Joan Ignasi Elias Cruz. The vast majority of agricultural publications the monitoring and assessment of the income Lluís Piqueres Pla. Núria Domènech Pont. focus on agronomic or more technical issues of our farms. Layout and composition and leave aside essential aspects for businesses Hands On such as business management (costs, acco- However, there is still a long way to go, and it is Printed by Ediciones Gráficas Rey, S.L. unting, etc.). for this reason that the Ministry of Agriculture, 50% recycled and 50% ecological paper. Livestock, Fisheries, Food and Natural Environ- Legal deposit In recent years, efforts have been made to im- ment is committed to continuing to promote B-16786-05 ISSN: 1699-5465 prove the level of knowledge among our agri- everything that may improve the financial ma- Authors are responsible for the contents of their cultural entrepreneurs and the employers of the nagement of agricultural enterprises. This busi- articles. DOSSIER TÈCNIC does not necessarily agree future in terms of business management. For ness and economic viability management must with these contents. Any full or partial reproduction of the works is permitted with mention of the source and this reason, in addition to the training given at take place in the context of the new European authorship. other institutions such as universities, business guidelines aimed at environmental sustainability Free distribution. To request more copies please email [email protected] administration schools, and so on, the DAAM in farming. Ministry of Agriculture, Livestock, Fisheries and Food is providing professionals in the sector with a Gran Via de les Corts Catalanes, 612, 4a significant range of training, which takes place This Dossier Tècnic, which is now in its 69th 08007 - Barcelona Tel. 93 304 67 45. Fax. 93 304 67 02 through initial face-to-face training at Agricultu- issue, aims to provide data on the costs of ex- e-mail: [email protected] ral Training schools and through the Agricultural tensive crops and viticulture, which occupy more Distance Learning continuous training program- than 50% of the area of agricultural crops in Further resources, links and digital edition: www.ruralcat.net me using ICT, i.e. through the RuralCat portal. Catalonia. It should be remembered, however, Cover photo: that as in many of these studies, the reader may Field of barley. Author: Jaume Lloveras Vilamanyà As a result of these efforts, it is apparent that have different approaches or figures from those the economic issues linked to the production, presented herein, which are under no circum- marketing and taxation are beginning to take stances intended to be dogmatic but rather a their place within the management of agricultural benchmark for reflection and reference. enterprises. I hope that this Dossier Tècnic will be useful and This major change means that farmers are be- will give you a more accurate perspective on coming increasingly aware of the role they play an area that is very important for the viability of as an agricultural business, with all that this im- agricultural enterprises. N69 DOSSIER 202 COSTS IN AGRICULTURE THE FARMING ACCOUNTANCY NETWORK IN CATALONIA, AN INSTRUMENT FOR MONITORING AND ASSESSING THE SECTOR Figure 1. Wheat. Author: Rosario Márquez. 01 What is the XCAC? ce of standardised microeconomic data, as the accounting principles applied to calculate the The Farming Accountancy Network in Catalonia results are the same throughout the European (XCAC) is a tool for identifying and assessing the Union. The XCAC is a source of income earned by Catalonia's farms and the im- standardised microeconomic pact that different agricultural policies have on This operation takes place as part of the coo- data. The accounting principles them. It is a wide-ranging statistical operation, peration agreement on statistics signed by the and is part of a Spanish framework (the Agri- Spanish Ministry of Agriculture, Food and the applied for the calculation cultural Accountancy Data Network - RECAN) Environment and the Catalan Ministry of Agri- are the same throughout the and a European framework (Farm Accountancy culture, Livestock, Fisheries, Food and Natural European Union. Data Network – FADN) , as well as being a sour- Environment. 1 The RICA was organised by Regulation No 79/65/EEC of the Council of 15 June 1965 setting up a network for the collection of accountancy data on the incomes and business operation of agricultural holdings in the European Economic Community. Obviously, this provision has undergone changes as a result of the passage of time, the incorporation of new technical requirements and the accession of new Member States to the EU. 303 N69 DOSSIER DOSSIERTÈCNIC 02 A little history adapt the system in order to meet Eurostat sizes; in other words, the type of activity or requirements. This is clearly set out in the activities engaged in by the farm unit con- The XCAC was created by the Order of 1 De- second article, which lists the structural cha- cerned and its inclusion in the Agricultural cember 1981. It was an attempt to systematise racteristics that farms must have to be mem- Census5. A certain number of units need to various initiatives for introducing accounting on bers of the XCAC. Paragraph a) reads: be selected depending on the weight of each farms that had been undertaken in previous ye- one. The aim is therefore to ensure that the ars. It aimed simply to organise the collection - The farm must be subject to single mana- range of the results obtained from the figures of information, and to subject it to a statistical gement. supplied by the different production units gi- analysis in order to establish indicators that ves as accurate a picture of real conditions would show the economic health of the sector. - Its production must be oriented towards in the sector as possible. As this operation the sale of agricultural products. takes place every year, the sequence of data This model operated until 1985, when as a provides an evolving image that highlights result of the Order of 30 January, the XCAC - It must be the basis of the work done by changes that have been confirmed over time. was integrated with the segment of RECAN the Head of the farm and account for at le- operating in Catalonia, thereby forming a sin- ast 0.75 to 1 AWU (annual work units)2 , or However, despite following the RICA criteria, gle project. Meanwhile, the same provision 1,800-2,400 hours/year, depending on the the XCAC contains a representative sample reviewed certain methodological aspects, various types and economic sizes. of farms in Catalonia, which means that this with a view to Spain's accession to the Euro- is not an exhaustive statistical operation; it pean Community, which took place in 1986, The current benchmark provision, which was does not cover all the farms in the country, in anticipation that it would be necessary to the basis for the implementation of adaptati- only those large enough to be considered ons to production conditions in Catalonia, is professional. According to EU regulations, Regulation (EC) 1217/2009 of the Council of what is known as the ‘economic size thres- 30 November 2009, setting up a network for hold’ is established for Spain as a whole at the collection of accountancy data on the in- 4,000 euros. This means that in order to be The XCAC and the section of comes and business operation of agricultural part of the sample that includes the XCAC, the RECAN that operated in holdings in the European Community3. farms must obtain an income amounting to Catalonia were integrated in that figure or above. 03 The sample of farms: criteria 1985. for selection 04 Information compiled As mentioned above, as a statistical ope- Regulation (EC) 868/2008 of the Commissi- ration, the XCAC collects information about on of 3 September 2008, which establishes agricultural farms in Catalonia, which is pro- the types of accounting information to be in- vided by the owners on a strictly voluntary cluded in farm returns. This is an extremely basis. They receive a small financial sum in comprehensive provision, which lists the return for providing the information.