The profitability decline in agriculture and horticulture continued for the fourth consecutive year. Return on assets was negative last year, -4.3 percent on average. The data can be found at the Taloustohtori online service opened for public use by MTT Agrifood Research Finland's Economic Research.
– The profitability of agriculture is poor and the course of development is alarming, says Accounting Manager Arto Latukka from MTT Agrifood Research Finland, who is in charge of the profitability bookkeeping service.
Last year the total return of agricultural and horticultural enterprises grew by 1.4 percent to EUR 97,300. Market returns went down by three percent, but losses were compensated by subsidies, which grew by nearly five percent from last year to EUR 40,000 per farm.
Average farm costs increased by nearly three percent to EUR 78,600. Thus the compensation for the entrepreneurs' labour input and capital invested, i.e. agricultural income, averaged EUR 18,700 in 2005, indicating a decline of 5.5 percent over the previous year. Entrepreneurial profit is resulted when the sum of the wage claim based on annual working hours and an hourly wage of EUR 12.3, and the sum of the interest claim for capital invested based on an interest of 5 percent are deducted from agricultural income. The average profit was a negative EUR -23,600.
Hourly wage less than four euros
When agricultural income is divided by the sum of wage and interest claims we arrive at the profitability coefficient. The profitability coefficient declined to 0.44, which means that entrepreneurs on average reached 44 percent of the objective set for wages and interest. Entrepreneurs hourly wages was € 5.4 and interest on capital invested was 2.2%. If we calculate 5 percent of interest on capital invested, we arrive at hourly wages of average € 3.4. Approximately 10 percent of enterprises reached over five percent of interest on capital invested and over € 12.3 of compensation per working hour.
– However, agricultural entrepreneurs have limited opportunities to influence external cost pressures, and entrepreneurs cannot transfer rising costs to product prices, he points out.
Large enterprises were more profitable than small ones, and profitability improved from south to north. This is partly the result of differences in production lines. The profitability coefficient of pig farms improved to 0.74, whereas that of cereal farms declined to 0.26. The solvency of enterprises declined, but remained at a healthy level as own capital was 73 percent of total capital.
Cold hard facts from Taloustohtori
The data is based on the profitability bookkeeping records of MTT Agrifood Research Finland's Economic Research, which are now available via MTT's new Taloustohtori online service (www.mtt.fi/kannattavuuskirjanpito and www.mtt.fi/taloustohtori). Records are available from financial year 1998 onwards, and the data available through the service includes the average financial statements of farms of various sizes from different production branches. Users can freely choose the data categories. Records from individual farms are not available.
Calculated from the figures of about 900 enterprises, the results are weighted so that they can be generalised to represent the average results of the largest 44,000 Finnish agricultural and horticultural enterprises. The result calculation and the classification and weighting system have been developed to meet the latest accounting standards. In order to preserve comparability, the results for each year were calculated retroactively from 1998.
Ulla Jauhiainen | alfa
Plasma-zapping process could yield trans fat-free soybean oil product
02.12.2016 | Purdue University
New findings about the deformed wing virus, a major factor in honey bee colony mortality
11.11.2016 | Veterinärmedizinische Universität Wien
Physicists of the University of Würzburg have made an astonishing discovery in a specific type of topological insulators. The effect is due to the structure of the materials used. The researchers have now published their work in the journal Science.
Topological insulators are currently the hot topic in physics according to the newspaper Neue Zürcher Zeitung. Only a few weeks ago, their importance was...
In recent years, lasers with ultrashort pulses (USP) down to the femtosecond range have become established on an industrial scale. They could advance some applications with the much-lauded “cold ablation” – if that meant they would then achieve more throughput. A new generation of process engineering that will address this issue in particular will be discussed at the “4th UKP Workshop – Ultrafast Laser Technology” in April 2017.
Even back in the 1990s, scientists were comparing materials processing with nanosecond, picosecond and femtosesecond pulses. The result was surprising:...
Have you ever wondered how you see the world? Vision is about photons of light, which are packets of energy, interacting with the atoms or molecules in what...
A multi-institutional research collaboration has created a novel approach for fabricating three-dimensional micro-optics through the shape-defined formation of porous silicon (PSi), with broad impacts in integrated optoelectronics, imaging, and photovoltaics.
Working with colleagues at Stanford and The Dow Chemical Company, researchers at the University of Illinois at Urbana-Champaign fabricated 3-D birefringent...
In experiments with magnetic atoms conducted at extremely low temperatures, scientists have demonstrated a unique phase of matter: The atoms form a new type of quantum liquid or quantum droplet state. These so called quantum droplets may preserve their form in absence of external confinement because of quantum effects. The joint team of experimental physicists from Innsbruck and theoretical physicists from Hannover report on their findings in the journal Physical Review X.
“Our Quantum droplets are in the gas phase but they still drop like a rock,” explains experimental physicist Francesca Ferlaino when talking about the...
16.11.2016 | Event News
01.11.2016 | Event News
14.10.2016 | Event News
09.12.2016 | Life Sciences
09.12.2016 | Ecology, The Environment and Conservation
09.12.2016 | Health and Medicine