Farmers’ income and debt, 2006

The average entrepreneurial income from agriculture increased from NOK 112 200 in 2004 to NOK 147 000 in 2005, but fell to NOK 117 200 in 2006. The large income in 2005 was mainly due to changes in tax regulations, which entered into force on 1 January 2006. The same changes were implemented for self-employed in other industries .

Many farmers do not have positive entrepreneurial income from agriculture

There are large variations in income from agriculture, mainly because agricultural holdings vary considerably in size, from hobby-like production to holdings with a turnover of more than NOK 1 million. 17 per cent of the farmers had negative entrepreneurial income from agriculture in 2006. This group may include farmers with small holdings and farmers who had just started farming or were expanding. 8 per cent of the farmers have no entrepreneurial income from agriculture. We assume that the majority of this group run hobby-like agriculture that is not considered an industry by the tax authorities. Another reason may be that the entrepreneurial income from agriculture is assigned to the farmer's spouse. On the other hand, 5 per cent of the farmers had an entrepreneurial income from agriculture of NOK 400 000 or more.

Married couples who run agricultural production together may share the taxable entrepreneurial income. In 2006, 10 300 spouses/registered partners had positive entrepreneurial income from agriculture, with NOK 116 600 on average. Distributed by all holdings, the average entrepreneurial income for spouses/registered partners was NOK 24 600.

For all farmers, the average gross income was NOK 376 500 in 2006. On average, wages and salaries exceeded the entrepreneurial income from agriculture, accounting for 42 and 31 per cent of the gross income respectively. The remaining gross income consisted of other entrepreneurial income, pensions and capital income.

Large variations between different farm types and counties

Specialised cattle dairying, specialised sheep farming and specialised cereal and oil-seed production are the most frequent types of farming in Norwegian agriculture. The holding sizes vary considerable between the three farm types. Cattle dairying requires significant labour input during the whole year, while many farmers run sheep farms and cereal and oil-seed production part time. For farmers who run specialised cattle dairy holdings, the average entrepreneurial income from agriculture was NOK 192 800 in 2006. For farmers with specialised sheep farming and specialised cereal and oil-seed production, the corresponding figures were NOK 54 700 and NOK 57 600 respectively. Farmers who run specialised pig/poultry holdings had the highest entrepreneurial income from agriculture with NOK 242 200.

Distributed by county, farmers in Rogaland and Nord-Trøndelag had highest entrepreneurial income from agriculture. In both counties, the average was NOK 157 000. Farmers in Telemark had the lowest average income with NOK 62 200.

Tables:

• Table 1 Entrepreneurial income from agriculture for holders, by county, agricultural area in use and sex of holder
• Table 2 Entrepreneurial income from agriculture for holders, by type of farming. 2006
• Table 3 Average gross income for holders, by county, agricultural area in use and sex of holder. NOK
• Table 4 Average gross income for holders, by type of farming. 2006. NOK
• Table 5 Holders by entrepreneurial income from agriculture as per cent of gross income, by county, agricultural area in use and sex of holder
• Table 6 Holders by entrepreneurial income from agriculture as per cent of gross income, by type of farming. 2006