Agricultural income account
13.101 Historically, there has been user demand to obtain more detailed data relating to the agriculture industry. It was a significant industry in the past, so this level of detail was important for economic analysis. There is still interest in this level of detail even though the significance of the agriculture industry in the Australian economy has declined over the years.
13.102 Agricultural income is the income accruing from agricultural production during an accounting period. It is equal to gross agricultural product at factor cost (i.e. gross value added at basic prices) less consumption of fixed capital, compensation of employees and net rent and interest payments.
13.103 Agricultural income is estimated both annually and quarterly. Quarterly current price and chain volume estimates are benchmarked to annual supply and use tables at the same level of aggregation that appears in Table 50 Agricultural Income (electronic) in the ABS publication, Australian System of National Accounts. That is, agricultural output is benchmarked at the commodity level (or aggregations of 'like' commodities), and total intermediate use is benchmarked at the aggregate level. For output, this ensures that the weights of commodities in the quarterly system (in both current prices and in chain volume terms) are annually 'reset' to align with weights derived from the supply and use system, but the same does not occur for intermediate use owing to lack of detail.
13.104 Multiplicative seasonal adjustment is not appropriate for commodities where there is zero output in any given quarter. Sugar cane, wheat, and fodder and grass are examples of commodities where there is at least one quarter of zero output each year. To deal with this, a pseudo-additive decomposition method is applied to seasonally adjust these series. See paragraph 7.63 for more details.
13.105 The table below outlines the sources and methods used to calculate agricultural income.
Agricultural income is calculated using the current price values for gross value of production less intermediate inputs, less compensation of employees, consumption of fixed capital and net property income, less net taxes on production.
Gross value of production for agriculture is estimated using data collected in the ABS publication, Value of Agricultural Commodities Produced, Australia, and is supplemented by annual data from the ABARES publication, Agricultural Commodities.
Intermediate inputs are estimated using data published in the ABS publication, Value of Agricultural Commodities Produced, Australia, and is supplemented by annual data from the ABARES publication, Agricultural Commodities.
Compensation of employees is estimated using supply and use benchmarks for wages and salaries and employer social contributions, and extrapolating the latest years using data from the ABARES publication, Agricultural Commodities (Farm Costs and Returns – Labour). Annual data are split across the quarters using weights as allocators.
Consumption of fixed capital attributable to agriculture is estimated using a percentage of the total consumption of fixed capital value for Agriculture, Forestry and Fishing. This is based on weights estimated from data in the ABS publication, Australian Industry.
Net property income payable is calculated by summing farm interest, farm rent and third-party insurance less FISIM. Data are sourced from the ABARES publication, Agricultural Commodities for interest paid; total overheads paid; farm management deposits; and rates and taxes. Other data are sourced from the Reserve Bank of Australia for small business other overdraft and total credit outstanding by sector. Annual data are split across the four quarters using a fixed proportion each quarter.
Taxes less subsidies on production is estimated using S-U benchmarks and extrapolating the latest year using the movement in current price value of total farm production, sourced from the Australian Bureau of Agricultural and Resource Economics and Sciences.
Income accruing to unincorporated farms, which contributes to gross mixed income for GDP(I), is estimated as gross value added for agriculture less compensation of employees payable to farm employees, less income accruing to incorporated farms.