SESSION 1 Commodity Selection Presentation of main criteria for selecting the products for which price incentives and disincentives will be calculated Agree on the list of products for which price incentives and disincentives will be calculated ID: 683932
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MODULE 3. Price Incentives and Disincentives
SESSION 1. Commodity SelectionSlide2
Presentation
of main criteria for selecting the products for which price incentives and disincentives will be calculated.Agree on the list of products for which price incentives and disincentives will be calculated
Module objectives:Slide3
MAFAP
estimates incentives and disincentives for agriculture using indicators based on pricesPrices are product related and thus it is necessary to agree for which products these incentives are calculated
The same criteria for product selection should be used in all countries to allow for comparison and aggregation
Moreover, these products will also be used to analyze public expenditure
Why select products....Slide4
Trade status:
Import substitute: produced in country but the country is a net importer of the commodity
Exported good:
produced in the country and exported (cash-crops)Non-traded: produced in the country and due to its characteristics (i.e. perishable) or market development (i.e. no processing; high transportation costs) the commodity is not internationally traded with this countryClassification of goods according to...Slide5
1
st criteria: Cover a significant percentage of total agricultural production (target: 70% in value)
2
nd criteria: cover major items of the food import bill3rd criteria: cover major agricultural exports 4th
criteria: cover major items of the diet (in quantity, calories and expenditure)
And any other product that the country might be interested in studying
Criteria for product selection
How to strike a balance between a comprehensive product selection and a manageable amount of productsSlide6
Should use 5-year averages to assure that there is no impact of extraordinary events
Criteria #1: Source: FAOSTAT Production – Production Indices
Data available for 2005-2009
Gross and Net Production value in international currency for all FAO MembersList commodities by size of production and select those accounting for 70%How to proceed....using FAO available data Slide7Slide8
Criteria #2 & #3
: Source: FAOSTAT TradeSTAT – Crops and Livestock productsData available for 2004-2008
Import and Export Value
List commodities by value of exports and imports and select those accounting for 70%How to proceed....using FAO available data Slide9Slide10
Criteria #4
: Source: FAOSTAT Food Balance SheetsLatest data available for 2007Data on quantities and calories per commodityAgain select products covering at least 70% of diet
For expenditure need to use retail prices from other sources (ideally covering a significant % of diet)
How to proceed....using FAO available data Slide11Slide12
Start
with commodities covering 70% of agricultural output.Add any major import or export not covered above if it represents more than 5% of total exports or imports or more than 1% of total country’s agricultural output.
Add
any major staple food in diet not covered above if it represents more than 5% of total diet or more than 1% of total country’s agricultural output.Check whether Africa-Wide and Regional-Wide key products are included, if not add if it represents more than 1% of total country’s agricultural output.Review the list and see whether it is feasible to study all commodities.If not delete products with the minor impact on total agricultural output.Combining the different criteria....Slide13
List of commodities covering 70% of agricultural output
Are commodities covering 70% of X and M included?Are commodities covering 70% of diet included?
Do the missed commodities represent more than 5% of total X or M?
Add products to the initial list
Are Africa and region wide products covered?
Do the missed commodities represent more than 5% of total diet?
Add products to the initial list
Is there any additional product interesting for analysis?
FINAL LIST OF PRODUCTS
Do the missed commodities represent more than 1% of total agricultural output?
Add products to the initial list
Add products to the initial list
Is the list feasible for study?
Reduce products starting from smallest share of total agricultural output
yes
yes
yes
no
yes
yes
yes
yes
yes
no
no
no
no
no
no
noSlide14
Undertake the same process with local data
sources (maybe more recent – diet composition mainly)Are the list the same?
How can we explain differences?
Does the country want to include a specific commodity? why?Check against local data sources.... ACTIVITY: Do the product selection procedure as described and discuss potential issues for analysis based on data availability
OUTPUT:
Final product list agreedSlide15
Thank you!