Abstract
The new farm classification in the Federal Republic of Germany is based on the structure of the potential gross margin. The gross margin of the individual lines of production was determined by deducting the variable costs from the variable output. The potential gross margin per farm is calculated by multiplying the crop areas (excluding forage growing) and the numbers of livestock by the average, standardized gross margin per unit and by adding up the results. The composition of this potential gross margin according to lines of production determines the assignment of farms to the various farm systems. In addition to classification according to economic orientation of the farms, it was decided to have a grouping according to income capacity. The measure of income capacity is the level of the so-called potential farm income. The potential farm income is calculated by deducting from the potential gross margin of a farm the fixed special costs and the overhead costs, having regard to the particular farm category. The socio-economic classification of the farms required for considerations of economic and agricultural policy can be deduced from the grouping according to the level of potential farm income.
Published Version
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