Value-added indicator fiches (common
result and impact indicators)
Guido Castellano
Agri L 4 - Evaluation of measures applicable to
agriculture; studies
Evaluation Expert Committee meeting, 23 June 2009
Background
 Requests for clarification on the measurement
of the value added indicators included in the
CMEF have been submitted by the Member
States to the Helpdesk during the last months
 A working group has been set up in DG AGRI,
supported by the Helpdesk, to address these
questions
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Concerned indicators
– result indicator # 2, “increase in gross value added in
supported holdings/businesses”, measured by gross
value added of supported agricultural, food or forestry
holdings;
– result indicator # 7, “increase in non-agricultural gross
value added in supported businesses”, measured by
gross value added of supported businesses;
– impact indicator # 1, “economic growth”, measured by
the net additional value added (PPS);
– impact indicator # 3, “labour productivity”, measured
by gross value added per full time equivalent.
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Main issues raised by the
Member States
 result indicators #2 and #7 do not reflect the gross value
added concept but rather the measurement of profit;
 result indicators #2 and #7 allow only for a limited use of
FADN data;
 methodological problems for the measurement of result
indicators #2 and #7 (e.g. how to determine the labour
costs to be deducted);
 terms such as turnover, sales and output are used
interchangeably in the result indicators #2 and #7 and
impact indicator #1 fiches (problems of interpretation);
 the measurement of impact indicator #1 (net additional
value added) can lead to possible misinterpretations (i.e.
gross/net value added versus gross/net effects of the
policy intervention)
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Approach followed for
tackling these issues
 Ensuring the overall consistency of the CMEF
 Simplification
 Supporting the possibility of comparing and
aggregating data at the EU level
 Enhancing possibilities for the Member
States to make use of FADN information as
data source for the quantification of these
indicators
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Amendments to the
indicator fiches
– definitions of result indicators #2 and #7
brought in line with the measurement of
gross value added
– definitions of result indicators #2 and #7
brought in line with the FADN methodology
– Minor revisions of the definition of impact
indicators #1 and # 3 (consistency in
terminology)
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New definitions
 Result indicator #2:
To measure the GVA of the supported holdings/enterprises, we use the following
proxy:
the average profit after taxes of assisted holdings/enterprises =
turnover – costs total output-total intermediate consumption, whereby:
- costs total intermediate consumption=
o direct inputs: seed, plants, fertilizers, crop protection products animal feed, energy, water other specific
costs (for crops, livestock, forestry or other)
contract work, …
o + overheads (i.e. costs linked to production activities, but not to specific lines of production):
maintenance and depreciation of buildings and machinery, energy, water insurances for buildings, other
overheads
o + labor costs
o + rent
o + interest
- turnover total output = Value of sales - bonuses given on sales - taxes on sales + balance of stocks +
own use or consumption
This indicator needs to be compared over different years to see its evolution
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New definitions
 Result indicator #7:
the average profit after taxes of assisted holdings/enterprises =
turnover – costs total output-total intermediate consumption, whereby:
- costs total intermediate consumption=
o direct inputs: seed, plants, fertilizer, animal feed, energy, water,
contract work, …
o + overheads: (i.e. costs linked to production activities, but not to specific lines of production):
maintenance and depreciation of buildings and
machinery, energy, water insurances for buildings, other overheads
o + labor costs
o + rent
o + interest
- turnover total output = Value of sales - bonuses given on sales - taxes on sales + balance of stocks +
own use or consumption
This indicator needs to be compared over different years to see its evolution
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New definitions
 Impact indicator #1:
Net additional gross value added is the change in the gross value added created
directly in supported projects and indirectly in the programme area that can be
attributed to the intervention once double counting, deadweight, displacement and
multiplier effects have been taken into account netted out.
At the level of the beneficiary, gross value added is the difference between total
output (sales) and the cost of goods and services purchased to produce the
output (make the sales) intermediate consumption.
To estimate the comparison of the welfare gain in EU, independently of the price level
in each country, the measurement should be made in Purchasing Power Standard
(PPS), by converting the Net Value Added measured in euros or in national currency
in PPS, using the conversion rates established by Eurostat.
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New definitions
 Impact indicator #3:
Change in labour productivity in beneficiaries targeted by the projects is the
Change in Gross Value Added per ful time equivalent (GVA / FTE) in beneficiary
population targeted by interventions and indirectly in the programme area that can
be attributed to the intervention once double counting, deadweight, displacement and
multiplier effects have been taken into account.
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Timing
– The proposed modifications in the
measurement of the value added result
indicators would apply from the year 2010
onwards.
– Detailed explanations concerning the abovementioned modifications of the indicator fiches
will be made available through the web page of
the Helpdesk.
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