|
1. Definition
| Name |
GROSS
MARGIN INDEX |
| Brief definition |
Comparison
between Standard Gross Margin (SGM) of each crop/husbandry |
| Unit of measure |
Euro |
| Spatial scale |
|
| Temporal
scale |
|
2. Position
within the logical framework DPSIR
| Type of Indicator |
Driving Force |
3. Target and
political pertinence
| Objective |
The
indicator aims to show how the market influences the choice
of farmers in terms of land use and crop rotation. In fact if
a simple crop has a higher SGM it will be grown consecutively
without any rotation. If an equilibrium exists between the crops,
then the farmers will easily use more environmently friendly
rotations. |
| Importance
with respect to desertification |
Environmental
sustainability could be compromised by the need for short-term
economic sustainability. Economic signals or support mechanisms
should be developed allowing farmers to act economically yet
maintaining the sustainability of their cropping system. To
encourage farmers to take rational economic decisions and be
environmentally responsible, the relative prices of agricultural
products need to be considered. |
| International
Conventions and agreements |
The CCD emphasizes
the importance of measures to improve the economic environment
with a view to eradicating poverty, increasing income and employment
opportunities especially for the poorest members of the community. |
| Secondary objectives
of the indicator |
It could give
a measure of the use of "dangerous" input (fertilizer,
fuel etc.). |
4. Methodological
description and basic definitions
| Definitions
and basic concepts |
Standard Gross Margins
The concept of Standard
Gross Margin (SGM) is used to determine the economic size
of farms, which is expressed in terms of European Size Units
(ESU). This concept is also used in the Farm Structure Survey
organised by Eurostat. For each region all crop and livestock
items are accorded an SGM. The Liaison Agencies calculate
the SGMs themselves on the basis of empirical data collected
from farms. To avoid bias caused by fluctuations (e.g. in
production due to bad weather or in input/output prices) three
year averages are taken. SGMs are expressed in Commission
publications in European Currency (EUR/ECU). SGMs are updated
every two years and are calculated on a regional basis for
more than 90 separate crop and livestock items. This large
number of items not only reflects the diversities of agriculture
within the European Union but also indicates the level of
detail that is required to ensure that the results of FADN
and other surveys are both comprehensive and reliable.
|
| Benchmarks
Indication of the values/ranges of value |
- I° range: <
Local Mean -St. Dev.
- II° range: >Local
Mean - St. Dev. < Local Mean
- III° range: >
Local Mean < Local Mean + St. Dev.
- IV° range: >
Local Mean + St. Dev.
|
| Methods of
measurement |
The standard
Gross Margin (SGM) of a crop or livestock item is defined as
the value of output from one hectare or from one animal less
the cost of variable inputs required to produce that output.
Having a definite set of SGM of potential crops, the indicator
measures the differences (in Euros) between them for each crop/husbandry. |
| Limits of the
indicator |
It does not
take in account the accessibility of the market in terms of
infrastructure. |
| Linkages with
other indicators |
Net
farm income; Mechanization
index; Fertilizer application |
5. Evaluation
of data needs and availability
| Data required
to calculate the indicator |
Standard Gross
Margin for each crop/husbandry |
| Data sources |
The Farm Accountancy
Data Network (FADN). At national level the responsibility for
FADN data collection rests with the Liaison Agencies, often
together with agricultural research institutes. These either
employ their own staff to visit sample farms and to collect
the data, or they contract this work out to accountants, universities,
farmers' cooperatives or other organisations. |
| Availability
of data from national and international sources |
FADN |
6. Institutions
that have participated in developing the indicator
| Main institutions
responsible |
University
of Basilicata
|
| Other contributing
organizations |
|
7. Additional
information
| Bibliography
|
The European Commission
DG Agriculture: Financing the common agricultural policy.
OECD, 1999: Environmental
indicators for agriculture, methods & results
http://europa.eu.int/
|
| Other references |
|
| Contacts
Name and address |
Prof. Giovanni Quaranta
Dipartimento Tecnico-Economico
per la Gestione del Territorio Agricolo-Forestale
Università della Basilicata
Via Macchia Romana
85100 Potenza
Italia
quaranta@unibas.it
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