2013年-CEPS欧洲政策研究中心_Performance_Indicators_in_Agricultural_Financial_Markets_30页_372kb

Summary of "Performance Indicators in Agricultural Financial Markets"

Core Content

This working paper presents the development of two performance indicators for agricultural financial markets: Economic Sustainability (ES) and Loan-to-Value (LTV). The indicators are derived from FADN (Farm Accountancy Data Network) data and are used to assess the financial health of agricultural firms and the potential for credit availability.

Main Points

1. Economic Sustainability (ES)

• Definition: ES measures the financial sustainability of a farm by calculating the net cash income after accounting for changes in funds and debt usage. It is expressed as:
  $$
  \mathbf{ES} = \mathbf{I} - (\Delta \mathbf{F} + \Delta \mathbf{D})
  $$
  Where:

  • $I$ is net cash income
  • $\Delta F$ is the change in funds used
  • $\Delta D$ is the change in debt use

• Key Findings:

  • Greece is the only country with consistently positive ES values, indicating a stable financial situation.
  • Most countries experience negative ES values in certain years, often due to positive changes in assets and negative changes in debt.
  • The room for consumption and taxes has generally decreased between 1995 and 2009, with some countries showing values lower than GDP per capita.
  • The FADN data suggests that individual farms within a country might still be better off than the aggregated national data implies.

2. Loan-to-Value (LTV)

• Definition: LTV is calculated as the ratio of total liabilities to total assets and serves as a measure of the firm's financial risk. It is also referred to as the debt-to-asset ratio.

• Key Findings:

  • The LTV values calculated from FADN data are significantly lower than the expectations of financial experts in WP 33, which suggested a range of 50–100%.
  • In most countries, the LTV is below 50%, with Greece, Italy, Ireland, Slovakia, and Poland having values of 10% or less.
  • UK and Germany have LTV values of 10–20%, which are still lower than the expectations.
  • The LTV of fixed capital (e.g., land and buildings) is higher than that of machinery, suggesting that fixed assets are more likely to be used as collateral.

• Implications:

  • Low LTV values indicate potential credit constraints.
  • There is room for increasing credit availability, especially if fixed assets are used as collateral.
  • Differences in LTV values may be attributed to varying definitions used by experts and differences in asset liquidity and value.

Key Information

Government Involvement

• Government involvement in agricultural credit markets varies across countries.
• Some countries have specific regulations or support mechanisms, while others rely on credit institutions.
• The effectiveness of government support in the agricultural sector is questionable, as seen in WP 33.

Farm Structure and Production

• Farm structure and production types significantly influence the performance indicators.
• Farm size varies widely, from 4.7 hectares in Greece to 70.8 hectares in the UK.
• The presence of livestock and the share of livestock output in total output also affects the financial indicators.

Data Sources

• FADN data is used for the calculation of the performance indicators.
• The online version of FADN data is aggregated at the national level, limiting the ability to analyze individual farm data.
• FSS (Farm Structure Statistics) data from Eurostat is used to build a typology of farm structures.

Challenges

• The use of FADN data has limitations, especially regarding the exclusion of FYROM from the dataset.
• The definitions of LTV used by experts may not align with the standard debt-to-asset ratio, leading to discrepancies.
• Asset liquidity and valuation differences across countries and regions can affect the availability of collateral and hence credit access.

Conclusions

• The ES indicator is valuable for assessing the long-term financial sustainability of agricultural firms but does not directly reflect financial market performance.
• LTV provides insight into the potential for increasing credit in the agricultural sector, especially when considering the use of fixed assets as collateral.
• The differences in performance indicators across countries can be partially explained by variations in farm structure, production types, and land prices.
• The low LTV values suggest that there is room for more credit, but the reliance on cash flow-based lending may be a limiting factor for many agricultural firms.