Economic Impact Assessment

AgBalance® considers economic accounts of revenues and expenses. Therefore, the economic analysis is focused on the selling price of the agricultural product and subsidies as an income and the variable and fixed costs of the agricultural system (Schöneboom, Saling, & Gipmans, 2012)1.

The basis for the economic assessment are 

  • variable costs: fertilizers, plant protection products, seeds, water, energy costs as well as variable personnel, machinery and other costs 
  • fixed costs: costs for land lease, fixed machinery costs, fixed personnel and other costs 
  • income: sales revenue and subsidies

Based on the collected data, the following indicators can be evaluated: 

  • profit
  • gross margin
  • net value added
  • total production costs 

Depending on the goal and scope of the study, only one of these indicators is chosen for the aggregation of the results to avoid double-counting of data. Usually, profit is selected as the economic indicator in most of the cases, as it gives a comprehensive indication of the economic performance of the farm for the analyzed crop.

Economic Impact assesment of maize, wheat and peas

1 Schöneboom, J., Saling, P., & Gipmans, M. (2012). AgBalance™ Technical Background Paper. Ludwigshafen: AgBalance™ Team at BASF SE