Total factor productivity is a well-established index of how efficiently farming inputs (such as fertilisers, labour) are converted into outputs (such as wheat, milk) giving an indication of changes in the efficiency and competitiveness of the agriculture industry. It is based on the ratio of inputs (indicator ‘E3 Volume of inputs used in agricultural production’) to outputs (indicator ‘E2 Volume of agricultural production’) such that the higher the value, the more efficiently inputs are converted into outputs. Data are based on volumes rather than values so that price effects are removed. The measure is known as Total Factor Productivity as it takes into account all output and input factors, including land, labour, intermediate consumption and depreciation of capital.
Readiness and links to data
As of 2022, the data published on total factor productivity for England by farm type are no longer labelled as experimental statistics and are therefore considered to be a robust source of data for this indicator. The data presented here are collated via the Farm Business Survey and are updated annually. Data on the total factor productivity of the agricultural industry in the UK are still published as National Statistics.
Figure E4: Efficiency of agricultural production measured by Total Factor Productivity
Table E4: Efficiency of agricultural production measured by Total Factor Productivity
Trend description for E4
Overall productivity is driven by both the output and input components. Total factor productivity of the agricultural industry in the UK was 27% higher in 2021/2022 than it was in 1990/1991. There has been an overall long-term increase driven by both increased outputs and a fall in inputs, although the separate trends (see indicators E2 and E3) have followed different patterns. There is considerable annual variation, this variation being mainly driven by variation in output volumes, and over the most recent year (2021/2022), total factor productivity of the agricultural industry in the UK rose by 7%.
Assessment of change
An increase in efficiency of agricultural production as measured by Total Factor Productivity has been observed over the short, medium and long-term. It is not possible to simplistically categorise any change as either an ‘improvement’ or ‘deterioration’ for the environment as this will depend on the farming practices driving change.
Change since 2018 has also been assessed. There has been an increase in efficiency of agricultural production measured by Total Factor Productivity since 2018, based on 4 years of data. We set a minimum of 5 data points for the production of a robust trend for this assessment so this result should be treated with caution until the next iteration is available.
Further information on this assessment, along with details on the methodology, is provided in the Assessment background page. Summaries by 25 Year Environment Plan goal and information on indicator links are presented in the Assessment results pages
Table E4: Assessment of change
|Component||Subcomponent||Period||Date range||Percentage change||Smoothing function||Assessment of change|
|E4||None||Short term||2015/2016 to 2020/2021||5.10||Loess||Change (increasing)|
|E4||None||Medium term||2010/2011 to 2020/2021||3.50||Loess||Change (increasing)|
|E4||None||Long term||1990/1991 to 2020/2021||21.63||Loess||Change (increasing)|
Note that assessment categories were assigned based on smoothed data, so percent change figures in Table E4 may differ from unsmoothed values quoted elsewhere. It is not possible to define a simplistic desired direction of change for this indicator so cannot assign ‘improvement’ or ‘deterioration’.