Agricultural Income

Family Farm Income (SE420) is the main income concept in the FADN standard results. It is calculated by deducting the costs of external production factors purchased outside the farm—such as wages, fixed rents, and interest—from the farm net value added (SE415), and taking into account subsidies and taxes on investments and compensation for the cessation of milk production (SE405).

Agricultural income serves as compensation for the entrepreneurial family’s own production factors (own labour and own capital) and entrepreneurial risk (profit/loss). However, agricultural income does not reflect the profitability of the farm because it does not take into account the amounts of labour and own capital used by the entrepreneurial family.