Total income from farming: estimates for Scotland 2014-2016

11. Notes

11.1 Uses of Information

The TIFF statistics are used for a wide range of purposes. The statistics help the government to assess the economic well-being of the different agricultural sectors, and to form, monitor and evaluate policy. The compilation of Scotland-level TIFF statistics is also part of the UK's requirement to submit an agricultural account to the Statistical Office of the European Communities on behalf of the UK.

Some examples detailing how the TIFF statistics are (or have been) used:

• Data from TIFF are used as part of the quarterly compilation of Scottish GDP. The TIFF statistics are also used to compile the National Accounts of the UK.
• The TIFF statistics are used frequently as part of informing briefing for Ministerial discussions with stakeholders across the industry. Price data for the sectors (as supplied by the markets) are also regularly updated and used to provide a picture of current market performance of these sectors.
• The TIFF statistics are also regularly used in the economic and analytical modelling of Scottish agriculture, for example, as used by the Food and Policy Research Institute ( FAPRI).

Results from the TIFF statistical publication are also used (and available to the public) in the following publications:

The Economic Report on Scottish Agriculture.

This is a compendium publication which contains detailed statistics on Scottish agriculture. It brings together information from the June Census, the Farm Accounts Survey, and TIFF calculations to provide a thematic overview of agriculture in Scotland.
http://www.gov.scot/Topics/Statistics/Browse/Agriculture-Fisheries/PubEconomicReport

Agricultural Facts and Figures pocketbook.

This provides a useful summary of the key statistics in the Scottish agriculture and food sector, in a convenient pocketbook format.
http://www.gov.scot/Topics/Statistics/Browse/Agriculture-Fisheries/PubFactsFigures

We also use the TIFF statistics to contribute to the formulation and publication of UK statistics on agriculture. These publications are co-ordinated by DEFRA and more details are available here.
www.gov.uk/government/publications?departments[]=department-for-environment-food-rural-affairs&publication_filter_option=statistics

11.2 Methodology

The Total Income from Farming ( TIFF) statistics are compiled annually by the Scottish Government's Rural & Environment Science & Analytical Services ( RESAS).

There are about 40 different data sources that are used in compiling the TIFF statistics, for example;

• The annual June Agriculture Census run by the Scottish Government ( SG), which itself also includes administrative data from Basic Payments applications and the British Cattle Tracing Scheme ( RADAR).
• The annual December Agriculture Survey run by the SG.
• Farm Accounts Survey run by the SG.
• Prices and volumes data sourced from specific market reports from the appropriate industries.
• Prices and volumes data sourced from bespoke surveys, including those run by the SG and additional separate surveys run by industry bodies such as the Agriculture and Horticulture Development Board ( AHDB), Home Grown Cereals Authority ( HGCA), British Potato Council ( BPC).

A full description of the updated methodology is set out in a separate document published online at
www.gov.scot/farmingmethodology2016

11.3 Data Quality Assurance

Data used in the compilation of TIFF undergo several validation processes as follows;

• Prices checking for any obvious errors upon receipt of data, using both internal components and totals cross-checking and cross-referencing against previous years.
• Auto-checking and identifying any internal inconsistencies once loaded into the relevant TIFF modules.
• Checking for any sudden changes in comparison with previous returns.
• Assessing any trends or switches in areas, volumes, prices etc. that look unreasonable.

If necessary data suppliers are contacted to ensure data are correct.

The Scottish Government also uses industry expertise to quality assure emerging agricultural statistics. For the annual release of headline farm income statistics in January, this process involves separate quality assurance meetings with representatives of the National Farmers Union Scotland ( NFUS) Committee of Scottish Clearing Bankers ( CSCB) and Quality Meat Scotland ( QMS).

These meetings are usually held about two weeks prior to the publication of the farm income statistics and involve a detailed discussion on emerging statistics and trends on all the components making up the farm income statistics. This discussion covers trends on agricultural production, prices, related costs and subsidy payments as well as on underlying methodologies used to generate the estimates. This is particularly useful for the components where data are not available for the most recent year and projections need to be made using various assumptions, indices and other information sources.

Representatives of NFUS, CSCB and QMS have up-to-date and widespread knowledge of the agricultural sector, as well as access to their own information sources. This enables them to identify any questionable trends in the emerging statistics, which the Scottish Government can then investigate further and amend if necessary before the statistics are finalised and published. More fundamental comments on underlying methodologies can also be considered ahead of the following year's publication.

In addition, representatives of the CSCB and QMS also assist the Scottish Government Statisticians in understanding the likely reasons and causes behind various trends.

These quality assurance meetings are held in strict confidence and representatives of NFUS, CSCB and QMS provide assurances that any emerging statistics and trends will not be used by their organisations until publication of the final statistics. It should be noted however, that many components of the farm income estimates, for example market prices, are already in the public domain.

11.4 Accuracy of first estimates

As described on page 2 of this publication, the 2016 data are only first estimates, much of the required information to produce them only becoming available later this year. The following table shows a comparison made between last year's 2015 first estimates and this year's 2015 second estimates. This should serve as an indicator of how reliable this year's 2016 first estimates are likely to be. Text is coloured blue if this year we have revised our estimate upwards, brown if we have revised down and black if there has been no change. Traffic-light colour coding, used in Table 1, is that provided at the time to illustrate how dependent the estimates were on data that were not available at the time of publication.

Last year's second estimates for 2014 have been compared with this year's final estimates for 2014, using the same categories as above. Sixteen of the 35 were zero change, eight were one per cent out, three were two per cent out, four were three per cent out, and four were four or more per cent out. This suggests that, apart from methodological changes, the second estimates are very close to our final estimates.

Table: Size of changes between last year's first estimates and this year's second estimates for 2015

11.5 Use of the GDP deflator

Prior to the January 2014 publication, the Scottish Government used the Retail Price Index ( RPI) to deflate present income indicators in real terms. Following a consultation on options for improving the RPI, the National Statistician concluded in January 2013 that one of the formulae (the Carli formula) used to produce the RPI did not meet international standards. Subsequently, the UK Statistics Authority withdrew National Statistics designation from the RPI. This led the four governments responsible for UK TIFF calculations to reconsider their use of RPI in TIFF, and to opt for a GDP deflator (implicit price deflator for GDP).

11.6 Other Agricultural Statistics Publications

The next agricultural statistics publication due to be released is the results of the 2016 December Agricultural Survey. This surveys around 15,000 holdings and results will be published in March 2017.

Also due for publication in April is the Farm Business Statistics publication, containing results and analysis from the Farm Accounts Survey.

Results from all Scottish Government agricultural surveys can be accessed here: http://www.gov.scot/Topics/Statistics/Browse/Agriculture-Fisheries/Publications