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Systems of Work Profitability Ratios in Agriculture:A Methodical Proposal

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  • Zbigniew Golas

Abstract

Purpose: The main purpose of this paper is to propose a methodological decomposition of the basic macroeconomic (sectoral) category of agricultural profitability, i.e., the profitability of labour, measured by the ratio of the income of agricultural entrepreneurs to the number of employed persons (the so-called unpaid labour). Design/methodology/approach: In the development of indicator systems for agricultural labour income has been based on the Economic Accounts for Agriculture (EAA). These accounts are a harmonised set of accounts valid in the EU countries, which makes it possible to analyse the economic situation in agriculture according to uniform principles. Findings: The article presents six proposals for the decomposition of the labour profitability index, which form a logical and coherent system of indicators developed on the basis of the sequence of the Economic Accounts for Agriculture (EAA). In addition, two versions are given for each of these systems. The first captures the profitability of agricultural labour in a more synthetic way, while the second is a proposal for an extended analytical system of agricultural labour profitability. Practical implications: The systems developed extend the possibilities for analysing sectoral economic and financial diversification as measured by labour profitability. Depending on the research perspective, agricultural labour profitability can be considered using six alternative indicator systems. In addition, the proposed agricultural labour profitability systems can provide an important basis for the construction of deterministic and stochastic models to quantitatively describe the economic phenomenon under study. Originality/value: This study significantly extends the analytical possibilities of the basic category of economic-financial efficiency of the agricultural sector, i.e. labour profitability. The six models proposed make it possible to analyse this category from six perspectives, thereby significantly increasing knowledge of the factors that determine the profitability of labour in this sector.

Suggested Citation

  • Zbigniew Golas, 2024. "Systems of Work Profitability Ratios in Agriculture:A Methodical Proposal," European Research Studies Journal, European Research Studies Journal, vol. 0(Special A), pages 968-978.
    • Handle: RePEc:ers:journl:v:xxvii:y:2024:i:speciala:p:968-978
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    References listed on IDEAS

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    1. Ashok K. Mishra & Charles B. Moss & Kenneth W. Erickson, 2009. "Regional differences in agricultural profitability, government payments, and farmland values," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 69(1), pages 49-66, May.
    2. Jon Melvin & Michael Boehlje & Craig Dobbins & Allan Gray, 2004. "The Dupont profitability analysis model: an application and evaluation of an e‐learning tool," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 64(1), pages 75-89, May.
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    More about this item

    Keywords

    Work profitability; agriculture; system of indicators; decomposition of indicators.;
    All these keywords.

    JEL classification:

    • Q10 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - General
    • Q14 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Finance
    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation

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