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6 GVAP is the value placed on recorded production of agricultural commodities at the wholesale prices realised in the market place. It is also referred to as the Value of Agricultural Commodities Produced (VACP). VACP is published annually in the ABS publication, Value of Agricultural Commodities Produced, Australia (cat. no. 7503.0)
7 The scope for the 2016-17 REACS was all agricultural businesses with an Estimated Value of Agricultural Operations (EVAO) of $40,000 or greater. This is a change from previous ABS REACS collections, where a scope of EVAO of $5,000 or greater was used, and is a continuation of the scope used in the 2015-16 Agricultural Census. For more information about EVAO, refer to the Explanatory Notes contained in the publication Agricultural Commodities, Australia (cat. no. 7121.0).
8 The scope change impacts on all components of GVIAP. Where information is sourced from the REACS there will be an impact on estimates, including for crops and horticulture where production information is now only collected from businesses with a value of agricultural operations of $40,000 or greater.
9 As a result of the change in scope, the 2016-17 GVIAP will not be directly comparable to GVIAP outputs published prior to 2015-16. To address this, additional estimates will be made available on request for a number of GVIAP releases from 2010-11 to 2014-15 using an EVAO of $40,000 or greater.
AGRICULTURAL COMMODITY GROUPS
10 GVIAP is calculated for each irrigated 'commodity group' produced by agricultural businesses. That is, GVIAP is generally not calculated for individual commodities, but for groups of 'like' commodities according to irrigated commodity groupings on the ABS agricultural censuses and survey forms. The irrigated commodity groups vary slightly on the survey form from year-to-year. The commodity groups presented in this publication are:
11 The ABS agricultural censuses and surveys collect area and production data for a wide range of individual commodities within the irrigated commodity groups shown in the list above. Further detail on the data items included in each agricultural commodities group can be found in the Appendix attached to this publication.
METHOD USED TO CALCULATE GVIAP
12 The statistics presented here calculate GVIAP at the unit (farm) level, using three simple rules:
13 These three rules apply to most commodities; however there are some exceptions as outlined below in paragraph 18. It is important to note that the majority of cases follow rules 1 and 3; that is, the commodity group on a particular farm is either 100% irrigated or not irrigated at all. For example, in 2004–05, 90% of total GVAP came from commodity groups that were totally irrigated or not irrigated at all. Therefore, only 10% of GVAP had to be 'split' into either 'irrigated' or 'non-irrigated' using the 'yield formula' (described below). The yield formula is explained in full in: Information Paper: Methods of estimating the Gross Value of Irrigated Agricultural Production, 2008 (cat. no. 4610.0.55.006).
14 Outlined here is the yield formula referred to in paragraph 13:
Ai = area of the commodity under irrigation (ha)
Yi = estimated irrigated yield for the commodity (t/ha or kg/ha)
P = unit price of production for the commodity ($ per t or kg)
Q = total quantity of the commodity produced (t or kg)
Ad = area of the commodity that is not irrigated (ha)
Ydiff = yield difference factor, i.e. estimated ratio of irrigated to non-irrigated yield for the commodity produced.
Note: a yield difference of 1 implies no difference in yield between irrigated and non-irrigated production.
18 Not all agricultural commodity groups can be satisfactorily calculated using the yield formula, in particular dairy production - It is assumed that if there is any irrigation of grazing land on a farm that is involved in any dairy production, then all dairy production on that farm is classified as irrigated.
19 Meat cattle, sheep and other livestock – in some previous releases of GVIAP data the estimates were derived by taking the average of two separate models:
From 2009-10 onwards the methodology was revised slightly, to better take into account those farms where several different types of livestock are grazing, as follows:
20 Most of the irrigated commodity groups included in these tables are irrigated by the application of water directly on to the commodity itself, or the soil in which it is grown. The exception relates to livestock, which includes dairy. For example, the GVIAP of 'dairy' simply refers to all dairy production (i.e. milk) from dairy cattle that grazed on irrigated pastures or crops. Estimates of GVIAP for dairy production must be used with caution, because in this case the irrigation is not applied directly to the commodity, rather it is applied to a pasture or crop which is then eaten by the animal from which the commodity is derived (milk). Therefore, for dairy production, the true net contribution of irrigation (i.e. the value added by irrigation, or the difference between irrigated and non-irrigated production) will be much lower than the total irrigation-assisted production (the GVIAP estimate).
21 The difference between (a) the net contribution of irrigation to production and (b) the GVIAP estimate is probably greater for livestock grazing on irrigated crops/pastures than for commodity groups where irrigation is applied directly to the crops or pastures.
22 Similarly, estimates of GVIAP for all other livestock (meat cattle, sheep and other livestock) must be treated with caution, because as for dairy production, the issues around irrigation not being directly applied to the commodity also apply to these commodity groups.
23 The estimates presented in this product are underpinned by estimates of the VACP, published annually in the ABS publication, Value of Agricultural Commodities Produced, Australia (cat. no. 7503.0). VACP estimates (referred to as GVAP in this publication) are calculated by multiplying the wholesale price by the quantity of agricultural commodities produced. The price used in this calculation is the average unit value of a given commodity realised in the marketplace. Price information for livestock slaughtering and wool is obtained from ABS collections. Price information for other commodities is obtained from a combination of ABS collections and non-ABS sources, including marketing authorities and industry sources. It is important to note that prices are state-based average unit values.
24 Sources of price data and the costs of marketing these commodities vary considerably between states and commodities. Where a statutory authority handles marketing of the whole or a portion of a product, data are usually obtained from this source. Information is also obtained from marketing reports, wholesalers, brokers and auctioneers. For all commodities, values are in respect of production during the year (or season) irrespective of when payments were made. For that portion of production not marketed (e.g. hay grown on farm for own use, milk used in farm household, etc.), estimates are made from the best available information and, in general, are valued on a local value basis.
25 It should be noted that the estimates for GVIAP are presented in current prices; that is, estimates are valued at the commodity prices of the period to which the observation relates. Therefore changes between the years shown in these tables reflect the effects of price change.
RELIABILITY OF ESTIMATES (SAMPLE ERROR)
26 The estimates in this product are derived from estimates collected in surveys and censuses and are subject to sampling and non-sampling error.
27 The estimates for gross value of irrigated agricultural production are based on information obtained from ABS agricultural censuses and surveys. These estimates are therefore subject to sampling variability (even in the case of the censuses, because the response rate is less than 100%); that is, they may differ from the figures that would have been produced if all agricultural businesses had been included in the ABS agricultural surveys or responded in the agricultural census.
28 One measure of the likely difference is given by the standard error (SE) which indicates the extent to which an estimate might have varied by chance; because only a sample was taken or received. There are about two chances in three that a sample estimate will differ by less than one SE from the figure that would have been obtained if all agricultural businesses had responded, and about nineteen chances in twenty that the difference will be less than two SEs.
29 In this publication, 'sampling' variability of the estimates is measured by the relative standard error (RSE) which is obtained by expressing the SE as a percentage of the estimate to which it refers. Most published estimates have RSEs less than 10%. For some states and territories with limited production of certain commodities, RSEs are greater than 10%. Estimates that have an estimated RSE between 10% and 25% should be used with caution as they are subject to sampling variability too high for some purposes. Estimates with an RSE between 25% and 50% should also be used with caution as they are subject to sampling variability too high for most practical purposes. Estimates with an RSE greater than 50% are considered too unreliable for general use.
30 RSEs for all published estimates are available on request.
31 Errors other than those due to sampling may occur because of deficiencies in the list of units from which the sample was selected, non-response, and errors in reporting by providers. Inaccuracies of this kind are referred to as non-sampling error and may occur in any collection, whether it be a census or a sample. Every effort has been made to reduce non-sampling error to a minimum in the collections by careful design and testing of questionnaires, operating procedures and systems used to compile the statistics.
ROUNDING AND CONFIDENTIALITY
32 Where figures have been rounded, discrepancies may occur between sums of the component items and totals.
33 Where figures for individual states or territories have been suppressed for reasons of confidentiality, they have been included in relevant totals.
34 Current publications and other products released by the ABS are available on the ABS website. The ABS also issues a daily Release Advice on the website which details products to be released in the week ahead.
35 Final estimates of agricultural commodity area and production were released in Agricultural Commodities, Australia, 2016-17 (cat. no. 7121.0) in May 2018.
36 Final estimates of the gross value of agricultural commodities from the 2016-17 Value of Agricultural Commodities Produced (VACP) collection were released in Value of Agricultural Commodities Produced, Australia (cat. no. 7503.0) in May 2018.
37 Final estimates of water used on agricultural properties were released in Water use on Australian Farms, 2016-17 (cat. no. 4618.0) in May 2018.
ABS DATA AVAILABLE ON REQUEST
38 As well as the statistics included in this and related publications, the ABS may have other relevant data available on request. Inquiries should be made to the National Information and Referral Service on 1300 135 070.
39 ABS publications draw extensively on information provided freely by individuals, businesses, governments and other organisations. Their continued cooperation is very much appreciated. Without it, the wide range of statistics published by the ABS would not be available. Information received by the ABS is treated in strict confidence as required by the Census and Statistics Act 1905.
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