Cash Costs, Non-Cash Costs, Imputed Costs and Total Costs

Cash Costs are direct cash outlays or cash payments for the use of different factors of production such as labor, fertilizers and chemicals.

Non-Cash Costs are expenditures that are paid in kind. Valuation of cost items makes use of the prevailing prices in the community. Generally, these non-cash costs represent the portions of the farmer's production that serve as payments for the use of particular factors of production.

Imputed Costs are expenditures that do not involve actual outlays in cash or in kind; they represent the opportunity costs of using owned resources in a particular activity and are computed using the values of the best alternative uses foregone.

Total Costs refer to the sum of cash costs, non–cash costs and imputed costs.

Depreciation - cost of wear and tear of farm tools and equipment, machinery and other farm facilities and structures. The straight line method is used in computing for depreciation where the cost of acquisition is divided by the estimated life span of farm equipment.(Imputed cost)

Fertilizer - any substance, solid or liquid, inorganic or organic, natural or synthetic, single or combination of materials that is applied to the soil or on the plant to provide one or more of the essential elements to improve plant nutrition, growth, growth, yield or quality, or for promoting a chemical change that enhances plant nutrition and growth.(Cash, Non-cash or Imputed cost)
Food Expenses - expenditures incurred in providing food to farm laborers.(Cash costs)

Fuel and Oil - the cost incurred for the use of gasoline, oil, and other related inputs.(Cash or Imputed cost)

Interest on Operating Capital - cost of capital foregone for the purchase of seeds, fertilizers, chemicals and payment for hired labor; this is derived by multiplying the total cash outlays by the prevailing lending rate.(Imputed cost)

Interest Payment on Loan - payment for the interest on borrowed capital used in the farm operations.(Cash or Non-cash cost)

Irrigation Fee - payment for irrigation services reported by the sample farmers during the reference period.(Cash or Non-cash cost)

Labor, Exchange - the work done by farm laborers in exchange (or as payment) to the work done by the farm operator and household members outside his own farm.(Imputed cost)

Labor, Family - labor rendered by the farmer's family members who take part in any production activities. Mandays of labor are valued at prevailing wage rate in the locality.(Imputed cost)

Labor, Hired - labor rendered by a person who is paid by the farm operator. Payment of wages is either in cash or in kind on the agreed basis of payment. Hired labor includes man or animal or machine or any combination with man-labor.(Cash or Non-cash cost)

Labor, Operator - imputed wages as payment to labor contributed by the operator. Mandays of labor are valued at prevailing wage rate in the locality. (Imputed cost)

Land Tax - amount of tax paid by the owner-operator for the farm land. (Cash cost)

Landowner's Share - portion of the farmer's production that goes to the owner of farm land based on the agreed sharing system. (Non-cash cost)

Pesticides - all types of yield-protecting form of chemicals purchased and paid in cash by the farmer. (Cash, Non-cash or Imputed cost)

Rental - payments for the use of land, machine, animal, tools and farm machineriesRental Value of Owned Land - imputed cost which is derived by asking the farmer how much would be the annual value of the land if it will be rented.(Imputed cost)

Repairs - cost incurred for all repairs and improvements made on tools and equipment and other facilities. (Cash cost)

Seeds/Planting Materials - plant materials used for sowing purposes for the production of food, fodder, oil, industrial crops, vegetable, fruit flower, lawn and tree crops and include vegetative parts and/or organs used for propagating the crops/species.(Cash, Non-cash or Imputed cost)

Sheller/Harvester/ Thresher's share - portion of the farmer's production that serves as payment to farm laborers who perform the harvesting, threshing and shelling activities.(Non-cash cost)

Soil Ameliorants - elements placed or mixed into the soil to replenish depleted soil nutrients for better plant growth. (Cash, Non-cash or Imputed cost)

Transport Cost of Inputs - expenditures incurred in transporting farm inputs to the production sites. (Cash cost)

Source of Definitions: Metadata for National Agricultural Statistics of the Philippines

Total Costs = Cash Costs + Non-Cash Costs + Imputed Costs

(see Assumption-Fish)

Survey on Costs and Returns

Philippine Statistics Authority (PSA)

Annually

2019

National

Gross Returns, Returns Above Cash Costs, Returns Above Cash and Non-Cash Costs, Net Profit-Cost Ratio and Returns on Investments

Gross Returns refer to the gross value of production. It is derived by multiplying the total volume of production by the farmgate or producer price.

Returns Above Cash Costs - returns after deducting the total cash outlays from the total value of production.

Net Profit-Cost Ratio – determines the rate of return to the farmers (the amount earned by the farmer for every peso spent in the production).

Return on Investments – measures the amount of return on an investment, relative to the investments costs. The result is expressed in percentage.

Returns Above Cash and Non-Cash Costs - returns after subtracting the cash and non-cash costs from the total value of production.

Source of Definitions: Metadata for National Agricultural Statistics of the Philippines

Gross Returns = Total Production x Farmgate Price

Returns Above Cash Costs = Gross Returns - Cash Costs

Returns Above Cash and Non-Cash Costs = Gross Return - (Cash Costs + Non-Cash Costs)

Net Profit-Cost Ratio = Net Return ÷ Total Costs

Return on Investments = Net Profit-Cost Ratio x 100

(see Assumption-Fish)

Survey on Costs and Returns

Philippine Statistics Authority (PSA)

Annually

2019

National/Regional

Agricultural Accounts Division
Philippine Statistics Authority
16th Floor, Eton Cyberpod Centris 3, EDSA cor Quezon Ave., Barangay Pinyahan, Quezon City
Tel. No.: (02) 376-1954
aad.staff@psa,gov.ph

30 September 2020