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MODULE 3. Price Incentives and Disincentives MODULE 3. Price Incentives and Disincentives

MODULE 3. Price Incentives and Disincentives - PowerPoint Presentation

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MODULE 3. Price Incentives and Disincentives - PPT Presentation

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

list products criteria total products list total criteria agricultural commodities output product diet data add country covering production major

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Slide1

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 Slide7
Slide8

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 Slide9
Slide10

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 Slide11
Slide12

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!