Annex White book.pdf

external cost – are not consumed in the period of only one productioncycle. Thus, it is necessary to calculate the part of the cost thatcorresponds to partial consumption of production factors.• Labor force: Group of workers, who provide services during theproduction procedure. Those costs could be fixed or variable,depending on the payment system. If the payment depends onactivity volume the costs are variable, in every other case thecosts are fixed.• Tractors, tools and farming equipment. Farming machinery is aproduction element that is partially destroyed during the wholeprocedure. Machinery creates direct or indirect costs due towear-out. Thus, the cost of their use is considered as a farmingproduction cost.A5.1.1.2. Gross incomeThe gross income of a production includes all main product sellingrevenues as well as those revenues from secondary products or by-productsof the same production.The calculation of the prices for main products as well as for byproductsis based on a market analysis.A5.1.1.3. Gross profit marginAccording to decision 85/377, June the 7th 1985 of the EEC Committee,which establishes a gross profit margin typology for agriculturalholdings, following criteria should be taken into consideration:• Gross profit of a agricultural holding is the gross production valueminus all special allocated expenses.• Gross production value equals to the aggregation of the main productvalue added to the value of the secondary product.The direct expenses that must be deducted from the gross incomein order to calculate the gross profit are mentioned in section 6.1.1.1.Following tables demonstrate production costs, revenues and grossprofit for five years, starting from bulb planting in Greece, Spain andItaly.176