Home > Statistics > Regional economic agricultural accounts > Concepts and definitions

Concepts and definitions

Agri-environmental aid (subsidy)

Agri-environmental aid is an environmental subsidy system funded by the government and the EU for reducing environmental burdening from agriculture, and promoting biodiversity and taking care of the cultivated landscape. The aid is mainly granted to crop growers and compensates the environmental protection expenditure they incur.

Basic price

Basic price is a price concept in the national accounts. The basic price is the price receivable by the producers from the purchaser for a unit of a good or service produced as output, minus any tax payable on that unit as a consequence of its production or sale (i.e. taxes on products), plus any subsidy receivable on that unit as a consequence of its production or sale (i.e. subsidies on products). It excludes any transport charges invoiced separately by the producer. It includes any transport margins charged by the producer on the same invoice, even when they are included as a separate item on the invoice. (subsidies on products).

Gross fixed capital formation

Gross fixed capital formation consists of resident producers' acquisitions, less disposals, of fixed assets. Fixed assets are tangible or intangible assets produced as outputs from processes of production that are themselves used repeatedly, or continuously, in processes of production for more than one year.

Intermediate consumption

Intermediate consumption consists of the value of the goods and services consumed as inputs by a process of production, excluding fixed assets whose consumption is recorded as consumption of fixed capital. The goods and services may be either transformed or used up by the production process.

Products used for intermediate consumption should be recorded and valued at the time they enter the process of production. They are to be valued at the purchasers’ prices for similar goods or services at that time.

NUTS division

NUTS (Nomenclature des Unités Territoriales Statistiques) is the regional classification system of the EU, according to which all common regional statistics of the EU are compiled. The official NUTS division is recommended to be used as the primary regional division in statistics. The NUTS classification is defined in the Regulation of the European Parliament and of the Council No. 1059/2003. This is updated by the European Commission's delegated regulation. NUTS 2021, that is valid from 1 January 2021, is based on the delegated regulation 2019/1755.

The NUTS nomenclature is used for

a) collecting, developing and harmonising Community regional statistics

b) socio-economic analyses of areas

c) defining Community regional policy.

In Finland NUTS level 1 refers to the division into Mainland Finland and Åland and NUTS level 2 major regions. Regions should correspond to the NUTS level 3 areas, but Finland's NUTS 2021 remains unchanged and corresponds to NUTS 2016 (valid from 1 January 2018 - 31 December 2020). Sub-regional units form LAU level 1 (NUTS 4) and municipalities LAU level 2 (NUTS 5). LAU (Local Administrative Unit).

In the European statistics the most important one is NUTS level 2 (major regions), on which all regional data are to be produced.

Output at basic prices

Output at basic prices consists of the products which have been produced in the accounting period. Three categories of output are distinguished: market output, output for own final use, and other non-market output. Output is to be recorded and valued when it is generated by the production process.

Producer price of farmers

The price received by farmers for their agricultural products without value added taxes and subsidies on productions on farms or in the first stage of the marketing chain.

Subsidies

Subsidies (D.3) are current unrequited payments which general government or the institutions of the European Union make to resident producers, with the objective of influencing their levels of production, their prices or the remuneration of the factors of production. Other non-market producers can receive other subsidies on production only if those payments depend on general regulations applicable to market and non-market producers as well.

Subsidies granted by the Institutions of the European Union cover only current transfers made directly by them to resident producer units.

Subsidies are classified into:

a) subsidies on products (D.31)

(1) import subsidies (D.311)

(2) other subsidies on products (D.319)

b) other subsidies on production (D.39).

Value added

Value added (gross) refers to the value generated by any unit engaged in a production activity. In market production it is calculated by deducting from the unit's output the intermediates (goods and services) used in the production process and in non-market production by adding up compensation of employees, consumption of fixed capital and possible taxes on production and imports.