Economic Report on Scottish Agriculture, 2016

3.7 TIFF per annual work unit (Tables A15, A16)

Table A15 provides information on a range of economic indicators related to Total Income from Farming ( TIFF).

One measure that is similar to the FBI per FTE (of unpaid labour), in section 3.6, is TIFF per annual work unit. This considers the return to farmers, partners, directors and others with an entrepreneurial interest in the farm business, against the labour they themselves have invested in the business.

This is done by estimating the amount of entrepreneurial labour invested, expressed in terms of full time equivalent annual work units ( AWU). TIFF is then divided by this total to provide TIFF per AWU. AWU is effectively the same concept as the FTE in section 3.6, but AWU is calculated from Scotland-level agricultural census data on the number of entrepreneurial workers, whereas the FTE figure is calculated by converting FAS data, on hours of unpaid worked, into the equivalent number of people.

Table A15 shows that in 2015, the total amount of entrepreneurial labour invested was estimated as 26,462 AWU. Dividing the TIFF figure of £667 million by this labour, provides an average TIFF per AWU estimate of £25,192. The updated figure for 2014 (the year to which the FBI/ FTE figure more generally relates) was £29,104.

Chart 3.10 shows that between 2005 and 2015, and accounting for inflation, TIFF per AWU increased by £6,500 (34 per cent). This increase reflects the £130 million (24 per cent) real terms increase in TIFF over the same period, as well as a decrease in entrepreneurial labour of 2,440 AWUs (eight per cent). In other words, in 2015 a larger TIFF was being generated by a lower amount of entrepreneurial labour, compared to 2005.

Chart 3.10: Entrepreneurial labour and TIFF per AWUs, both accounting for inflation, 2005 to 2015