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UK Total Income from Farming

25 July 2013

Total Factor Productivity of the UK Food Chain: 2000-2011 - Revised EstimatesTotal Factor Productivity of the UK Food Chain: 2000-2011 - Revised Estimates

The total factor productivity (TFP) of the United Kingdom food chain is an indicator of the efficiency and competitiveness of the food industry within the United Kingdom. An increase in TFP indicates the industry is improving its competitiveness.
Total Income from Farming in the UK

Key messages

  • Total factor productivity of the UK food chain beyond the farmgate grew by 0.5 per cent in 2011. It has been rising gradually since 2002.
  • Benchmarking against a wider economy measure shows that the average annual growth in the food chain between 2002 and 2011 was 0.7 per cent compared to 0.2 per cent in the wider economy.
  • Productivity in both food manufacture and food wholesale have risen overall since 2000 whilst productivity of food retail and catering are at similar levels to 2000.
  • Comparing 2011 with 2010 the manufacture, wholesale and non-residential catering sectors of the food industry saw year on year increases in productivity.

Sector headlines

Total Factor Productivity trends within the UK food industry 2000 to 2011

  • Food and drink manufacture has had the largest gains in productivity in the food chain with, labour volume dropping by 23 per cent since 2000. The small increase in productivity in 2011 was due to falls in the volume of purchases being more than the fall in turnover.
  • Food wholesale productivity has risen gradually since 2002.
  • Food retail productivity in 2011 was 1.0 per cent lower than 2010. Productivity fell due to an increase in labour (1.3 per cent) and a larger fall in the volume of output compared with the volume of input. Food prices were on average 5 per cent higher in 2011 than in 2010.
  • Non-residential catering showed productivity growth for the second year in a row. In 2010, productivity was 4.5 per cent up on 2009 whereas in 2011 productivity was not as strong but still managed to grow by 1.5 per cent. Productivity had been falling since 2004 as output fell. The increase in productivity in 2011 was due a fall in the volume of input and the volume of output increased. Catering is more affected by the state of the economy than other sectors of the food chain, and its productivity over the last 10 years reflects the economic downturn and recent recovery.

July 2013

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