Agriculture, measurement, sustainability: the paradigm of the Farm Sustainability Data Network
By Valeria Paganizza
On the 30 of October 2024, the Commission Implementing Regulation (EU) 2024/2746 of 25 October 2024 laying down rules for the application of Council Regulation (EC) No 1217/2009 setting up the Farm Sustainability Data Network and repealing Commission Implementing Regulation (EU) 2015/220 was published. What is it about and why does it deserve a mention?
There are at least three reasons, which we could summarize in agriculture, measurement and sustainability.
Agriculture
As the heading of the Implementing Regulation suggests, the subject of the act is the Farm Sustainability Data Network (FSDN). The Farm to Fork Strategy included a section «3.2 Advisory services, data and knowledge-sharing, and skills» that anticipated the Commission’s will to propose legislation to convert its Farm Accountancy Data Network (FADN) into the Farm Sustainability Data Network. The same forecast had been included in the Commission’s staff working document SWD(2020) 93 final, section 3.4. The FADN has been converted into the FSDN by Regulation (EU) 2023/2674, with applicability from 2025, and the provisions to ensure its correct functioning have been adopted with the mentioned Implementing Regulation (EU) 2024/2746.
The FADN is a network set up by Article 1 of Regulation (EC) no 1217/2009 intended to collect the accountancy data needed for the annual determination of incomes on agricultural holdings and for a business analysis of agricultural holdings, in order to meet the needs of the Common Agricultural Policy (CAP). As specified in Article 1 of the mentioned Regulation, collected data represents the basis for the Commission’s reports «on the situation of agriculture and of agricultural markets as well as on farm incomes in the Community». By means of information shared in the network, the EU Institution could have a picture of the effects of CAP measures, useful to shape future reforms. Data collected by the FADN have been published in the agrifood data portal, in aggregate form, along with statistics by the Commission, on the financial circumstances of farmers across the European Union.
The FADN, therefore, and, as a consequence, the new FSDN, fall within the domain of digital measurement tools for agriculture.
How is the FADN database populated? Data on FADN is collected by means of national surveys [Article 1, par. 2, a) and 5 of Regulation (EC) no 1217/2009] to agricultural holdings having an «economic size equal to, or greater than, a threshold», set by Commission Delegated Regulation (EU) No 1198/2014. These holdings should represent «the largest possible share of agricultural output, agricultural area and farm labour, of holdings run with a market orientation» (Article 2 of Regulation (EU) No 1198/2014). The categories of data collected through the surveys are identified by Annex II of the Regulation we have just mentioned. They include general information on the holding (location, status, type and classification) and data on the types of occupancy of the agricultural land areas used by the holding; labour conditions such as the number of persons working on the farm, time worked and the type of engagement; the assets of the holding, per category and related to the accounting year; quotas and other rights related to the holding’s operation in the accounting year; the holding’s indebtedness in the accounting year; the application of the value added tax (VAT) systems to the holding; inputs used in the holding’s operation, such as specific costs and overheads, to produce its outputs in the accounting year; production and use of crops in the holding; production and use of livestock; production and use of animal products and services; the activities other than farm work, directly related to the holding and having an economic impact on it, and where either the resources of the holding (area, buildings, machinery, agricultural products, etc.) or the products of the holding are used; subsidies received during the accounting year (Annex II, Farm returns: main groups of accountancy data to be collected).
With reference to the new FSDN, the 2024 Regulation includes the threshold of economic size for the field of surveys in Annex I, while it identifies in Annex II the number of returning holdings and in Annex III the Models and methods for the preparation of the selection plans mentioned by Article 5a of Regulation (EC) no 1217/2009.
What are the reasons for turning the FADN into the FSDN? One of the lacking elements of the FADN pertains to the environmental data [Recital no 8 of Regulation (EU) 2024/2746]. With a European Union that set as a priority, for the previous Commission’s term, a greener Europe (Green Deal), re-confirmed, at least in announcement, in the new Commission’s term, and a CAP that has been shaped to enhance sustainability in agriculture, data collection had to be updated in order to include “numbers” significant to the new pursued objectives. The new network indeed covers, among others, information on organic farming and integrated pest management (IPM), carbon farming, plant protection products, soil and water management, energy use, animal welfare.
Measurement
The term “Numbers” introduces the second word that we identified to summarize the reasons for Commission Implementing Regulation (EU) 2024/2746: measurement. And there is nothing as topical as William Thomson’s words to express the importance of measurement: «When you can measure what you are speaking about and express it in numbers, you know something about it, and when you cannot measure it, when you cannot express it in numbers, your knowledge is of a meager and unsatisfactory kind. It may be the beginning of knowledge, but you have scarcely in your thoughts advanced to the stage of science» [Thomson W. (Lord Kelvin) Popular Lectures and Addresses vol. 1, ‘Electrical Units of Measurement’, delivered 3 May 1883, Macmillan and Co., London-New York, 1889, p. 73].
As mentioned in the previous paragraphs, the reason for the establishment of the FADN was to collect data on incomes of agricultural holdings, in order to get knowledge of the effects of the CAP measures. Information acquired could have then been used to improve CAP’s tools and support. Even if the FSDN includes further data, such as those on sustainability and environmental aspects, the reason for its creation is again the need to collect data useful to gain knowledge of the agricultural holdings’ characteristics. According to Regulation (EU) 2024/2746, the “numbers” collected through the Farm Sustainability Data Network will be in particular necessary to calculate the total standard output of a holding, obtained by multiplying the standard output coefficient of each crop and livestock variable by the number of corresponding units. In addition, the Regulation requires to identify the economic importance of other gainful activities to the holding, to be «expressed as a percentage band of the holding turnover» [Article 7 of Regulation (EU) 2024/2746].
Once Member States have calculated the standard outputs, they must submit them to the Commission (EUROSTAT). Along with additional and different datasets, RISA data will be used to perform analyses on the state of sustainability of Union agriculture [Article 1, par. 3, Regulation (EU) 2023/2674].
Sustainability
The third word that summarizes the reasons for the establishment of the FSDN is thus sustainability. As the name of the network suggests, the new FSDN will contribute, with the collection of data, to the Farm to Fork and Biodiversity Strategies’ targets. Information will in particular «enable the benchmarking of farm performance against regional, national or sectoral averages. Through tailored advisory services, it will provide feedback and guidance to farmers and link their experience to the European Innovation Partnership and research projects. This will improve the sustainability of participating farmers, including their incomes» (Farm to Fork Strategy, section 3.2).
As well as the FADN, also the FSDN is a network that collects data on agriculture. In explaining the reasons for the transformation of the FADN into FSDN, Regulation (EU) 2023/2674, in its recital no 4, recalls the objectives of the CAP set out in Article 39 of the Treaty on the Functioning of the European Union (TFEU). It then adds the need to «cover the three dimensions of the sustainability of Union agriculture, namely the economic, environmental and social dimensions», with reference both to Articles 5 and 6 of Regulation (EU) 2021/2115 and to integrate data on environmental protection into the FSDN «to contribute to the assessment of additional aspects related to the sustainability of Union agriculture».
Being sustainability considered in its developing dimension, the Regulation establishing the FSDN gave the Commission the power to adopt delegated acts, under Article 290 TFEU [Recital no 6 and Article 1 (5), (7), (8) of Regulation (EU) 2023/2674].
Adapting the FADN to the FSDN
The adaptation of FADN to the new FSDN requires some changes to definitions, procedures and budget.
As for definitions, «farmer» is thus identified as the «natural or legal person whose holding is situated in the Union», while farm or holding is «a single unit, both technically and economically, that has a single management and that undertakes economic activities in agriculture in accordance with the general use of those terms in the context of Union agricultural surveys and censuses». To the purposes of the FSDN, fundamental definitions are that of «returning holding», which «means any holding for which a farm return is compiled for the purposes of the FSDN» and of «farm return», that identifies «the form, either to be compiled or already compiled, with data about the returning holding» [Article 1, par. 4, Regulation (EU) 2023/2674].
As for the procedure, the 2023 Regulation requires Member States to enable the Commission to strengthen its ability to analyse sustainability issues by supplementing farm return data with information from the data used for monitoring and evaluating CAP Strategic Plans (DME), as specified by the Implementing Regulation (EU) 2022/1475, or from the Integrated Administration and Control System (IACS) established by Regulation (EU) 2021/2116 of the European Parliament and of the Council, and the Delegated Regulation (EU) 2022/1172, while ensuring no additional administrative burden is placed on Member States and participating farms (Recital no 13 and Article no 1, par. 8). To this purpose, Member States will provide data from different data sets, even if these data collections may vary as for items or definitions: States are not asked to ensure consistency among information acquired by different data sets.
Finally, as for the budget, the European Agricultural Guarantee Fund (EAGF) should provide financial support to help Member States adapt their systems to the updated scope and management requirements of the FSDN. To ensure consistent implementation of this funding, the Commission should be granted authority to define procedures for determining the amounts and contributions to be allocated to Member States from the Union budget, along with criteria for distributing these financial contributions (Recital no 28).
What’s next?
The transition from the FADN to the FSDN undoubtedly marks an evolution in the framework for collecting and analysing agricultural data in the European Union, the significance of which can only be hypothesized at this point. Expanding the scope of data collection to include a broader range of farm characteristics and socio-economic indicators, RISA will enable a greater understanding of the European agricultural sector. The data should likely serve as support for the formulation of policies based on real evidence, improving the analysis of the agricultural market and contributing to the development of sustainable and resilient agricultural practices.