The motivation to this question is the Biblical commandment of Sabbatical year, in which the land should be allowed to rest and should not be cultivated. I am trying to estimate how much would it cost to actually implement this commandment in an industrial economy.
For concreteness, I use data about the Israeli agricultural product; my main problem is the interpretation of the data, which is probably applicable in other countries.
Here are the relevant data for 2013 (rounded and in billions of ILS):
- INPUT (excluding compensation for employee jobs) = 19.7. Of these: Input (purchased and from intermediate produce) = 17.5; depreciation = 2.2.
- OUTPUT: 30.0. Of these: crops = 18.1, animals = 11.9 (note that only land-cultivation is prohibited, while growing animals is permitted).
- DOMESTIC PRODUCT: Gross = 12.5, Net = 10.3 (the difference between them is the depreciation.)
- INSURANCE COMPENSATION AND OTHER RECEIPTS: 1.0.
- INCOME ORIGINATING IN AGRICULTURE: 11.1. Of these: Compensation for employee jobs: 5.3 (Q1: where do the other 5.8 go to?)
My assumptions are as follows:
- The consumers should still eat fruits and vegetables. So, instead of growing fresh fruits and vegetables, some of these will be imported, while others will be preserved from the previous year (e.g. dried fruits and other products with long shelf life).
- The farmers should be compensated on giving up the right to till their land, by giving them the same gross income that they have in a usual year.
- However, other workers that deal with agricultural produce, such as: truck drivers, traders, workers in fruit markets, etc., should not be compensated because they can still work with imported produce (Q2: do the figures in the table include the income of these workers? Or do they belong to a different branch of economics?)
I did several calculations and got different results:
When there is no land-tilling, there is no depreciation and no insurance reception. Hence, only the 10.3 net domestic product is relevant, and from this we should extract the 1.0 insurance, for a total of 9.3. This should be multiplied by 60%, which is the relevant part of "crops" (since the other 40% are "animals" which can be grown as usual). We get: 5.6.
take only the compensation for employee jobs (5.3), since only employees should be compensated (should the insurance receptions be subtracted?). Again multiply by 60% and get 3.2.
in a different source, I found the fact that the total number of crop farmers is only about 7000. Assuming a gross annual income of 240,000, which a top decile income, I got to only 1.7 (billion). AFAIK, most farmers make less than that, so the actual figure should be even lower.
Since the numbers in each calculation are quite different, I am interested to know what causes the difference, and which calculation should be used?