The Measurement of Farm Incomes by the Commission
European Court of Auditors, 2003
Background
- One of the five objectives assigned to the CAP in the EC Treaty of 1957 is ‘to ensure a fair standard of living for the agricultural community’, and this objective he has proved to be a highly influential for the development of the CAP
Findings
- ‘The European Community has never defined the concepts of ‘agricultural community’, a ‘fair standard of living’ or ‘income’’ – so it is not clear what statistics should measure and how to interpret results.
- The EU is using two instruments to assess farm incomes, the Farm Accountancy Data Network (FADN) and the Economic Accounts for Agriculture (EAA). Both suffer from a lack of harmonization across member states. Furthermore, they measure income from agricultural activity per holding rather than total disposable income per household (thus excluding non-farm income).
- Statistics on the Income of the Agricultural Household Sector (IAHS) targeted disposable income per household but were discontinued in 2002 due to data problems/costs
- Therefore, ‘the Community’s statistical instruments do not provide sufficient information on the disposable income of agricultural households to allow an evaluation of the agricultural sector’s standard of living.’
Comment
- Regrettably, data on disposable income per farm household is still not available. It is revealing how little effort has been made to substantiate this key justification for the CAP: better data would show how many farmers that receive income support are not poor (and often enough rich) and that intelligent social policies should be targeted at poor households, not farmers per se.
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