The German Farm Accountancy Data Network (FADN)

Expertise

A central data basis for assessing the economic situation and the impact of agricultural policies

Income analysis in the agricultural sector. (© Fotolia)

How can the economic situation and development of agricultural holdings be analysed quantitatively? What are the impacts of agricultural policies at the farm level?

On the basis of the German Farm Accountancy Data Network (FADN) we aim to represent the national agricultural sector in all its breadth and complexity. The German FADN collects and evaluates accountancy data of selected representative agricultural holdings on a voluntary basis. In the area of agriculture (including horticulture and permanent crops) about 11,000 agricultural holdings are currently participating. The initial objective of the German FADN was to obtain information on agricultural incomes. Since the 1990s, the database has become more and more important for assessing the impacts of (agricultural) policies; in particular, because German FADN-data does not only include the operating structure and production technologies but also the income, expenses and profits for a representative sample of farms.

Using the German FADN-data, not all, but a variety of questions on the economic situation and the adaptability of agricultural holdings with regard to changes in the policy, regulatory or technical framework can be answered. For example, we are able to show how many agricultural holdings are affected by a specific policy measure or what the consequences of strong price fluctuations are on financial stability. Furthermore, and by applying statistical and econometric methods, the driving factors of farm and income developments can be revealed. The German FADN-data is also a central part of the Farm model FARMIS, which helps to conduct ex-ante impact assessments taking into account possible adjustment responses at the farm level. Finally, it should be noted that results can be extrapolated to the regional and sectoral level by farm-specific weighting factors.

In 2012, the Thünen Institute of Farm Economics took over the tasks of the German Liaison Agency for the European FADN from the Federal Ministry of Food and Agriculture (BMEL). The European Commission uses the FADN to reflect agricultural incomes representatively and to analyze effects of the Common Agricultural Policy. Based on the German FADN, the Thünen Institute of Farm Economics annually transmits accountancy data according to common European requirements. Also, the Thünen Institute participates in the meetings of the FADN Committee at the European Commission in Brussels. In this regard, the Thünen Institute performs analyses, for example, in order to align income indicators used by the European Commission better to developments in Germany in the field of agricultural company structures.

The Thünen Institute and the BMEL have reached an agreement which also provides access to the German FADN-data for external researchers and scientists (in particular for universities), while ensuring confidentiality of the data.