Contributing to International Classification of Agricultural Products Xiaoning Gong, Haluk Kasnakoglu, and Hiek Som FAO, Rome, Italy Presentation at ICAS-4 Beijing, China, 22 October 2007

Presentation Outline What is the issue?What is the issue? –To establish a common international classification for agricultural products. What is the problem?What is the problem? –There was no such a classification. How to solve the problem?How to solve the problem? –To submit FAO Proposal for the improvement of CPC. What is the result?What is the result? –The new CPC reflects better the reality of agriculture and becomes very useful.

Why Is the Issue Relevant? A common classification is a powerful infrastructure and tool forA common classification is a powerful infrastructure and tool for –coordinating and integrating official statistics; –ensuring the comparability of statistical data over time and across sections and countries. Thus, –Promotes “communication” among datasets. By providing a common and standardized name, title, definition, and description for the individual item listed and a common and standardized way to group data.By providing a common and standardized name, title, definition, and description for the individual item listed and a common and standardized way to group data.

What Is the Problem? No common international classification for agricultural products in the world before CPC version 2.0 was approved by the 37th United Nations Statistical Committee in March 2006No common international classification for agricultural products in the world before CPC version 2.0 was approved by the 37th United Nations Statistical Committee in March 2006 –The structure and list of items in old CPC was not suitable; as a result, it was not used by agricultural statistics. –FAOSTAT Commodity List had been used but was obsolete and needed to be updated.

How to Solve the Problem? A taskforce on classifications was set up within the FAO Statistics Division in 2004;A taskforce on classifications was set up within the FAO Statistics Division in 2004; A network on classifications was established among different FAO departments/divisions;A network on classifications was established among different FAO departments/divisions; FAO Proposal for CPC was prepared and submitted to the UN-EG/TSG for inclusion in the new CPC;FAO Proposal for CPC was prepared and submitted to the UN-EG/TSG for inclusion in the new CPC; Consultation was conducted several rounds within and outside FAO; andConsultation was conducted several rounds within and outside FAO; and Purpose: to rationalize both groupings and listings of commodities in CPC.Purpose: to rationalize both groupings and listings of commodities in CPC.

FAO Proposal for CPC: Increasing Proper Details (1 of 2) The total number of items of agriculture at five- digit level in CPC v.1.1 is 221; in the new CPC v.2.0 is 506.The total number of items of agriculture at five- digit level in CPC v.1.1 is 221; in the new CPC v.2.0 is 506. The criteria and principles: the economic significance, collectibility or availability of data, historical continuity to ensure consistent time series in the 5-digit items, and international comparability.The criteria and principles: the economic significance, collectibility or availability of data, historical continuity to ensure consistent time series in the 5-digit items, and international comparability. Among 506 items, half of them are HS-compatible items; the other half are with split HS codes which can be characterized into four groups.Among 506 items, half of them are HS-compatible items; the other half are with split HS codes which can be characterized into four groups.

FAO Proposal for CPC: Increasing Proper Details (2 of 2) Four types of HS-split items:Four types of HS-split items: –Type I Commodities with high value of international trade; –Type II Commodities with high volume of domestic production; –Type III Seeds: produced under strict quality assurance systems both in the field and in research, breeding, selection, harvesting, sampling and testing, storage, processing, conditioning, packaging, and labeling to ensure quality; and –Type IV Feeds: Reclassification of meat meals is important especially following the Bovine Spongiform Encephalopathy (BSE) crisis in Europe.

FAO Proposal for CPC: Creating Sound Groupings (1 of 3) The structure in terms of grouping agriculture related products in the old CPC is not rationalThe structure in terms of grouping agriculture related products in the old CPC is not rational –“012 – Vegetables:” the only two items singly listed “01210 – Potatoes” and “ Locust beans;” (“Fruit” (01390) or “Stimulants and spices” (01690) or 019 “Miscellaneous crops”); –Important products such as “dried leguminous” and “edible roots and tubers with high starch or inulin content” were lumped together without distinguishing their components under “012 – Vegetables” side by side with “ Potatoes” and “ Locust beans,” making the structure bizarre and unbalanced; and –Under “013 - Fruit and nuts,” the only singly listed item is “ Grapes, fresh” and others are listed as combined/bundle products, such as citrus fruit, melons (which are arguably classified by many countries as vegetables rather than fruits).

FAO Proposal for CPC: Creating Sound Groupings (2 of 3) The individual agricultural products are the foremost important that the higher digits;The individual agricultural products are the foremost important that the higher digits; The 3-digit and 4-digit groupings have been thoroughly reviewed and examined while the 1-digit and 2-digit level sections and groups have been fixed and not supposed to be changed during this round of CPC update;The 3-digit and 4-digit groupings have been thoroughly reviewed and examined while the 1-digit and 2-digit level sections and groups have been fixed and not supposed to be changed during this round of CPC update; The 4-digit class level, especially in the vegetable and fruit categories, is designed mainly to accommodate and include as many types of vegetables and fruits as possible; andThe 4-digit class level, especially in the vegetable and fruit categories, is designed mainly to accommodate and include as many types of vegetables and fruits as possible; and The 3-digit group level has been carefully reviewed and revised to reflect the importance of different types of products. A lot of efforts have been made to properly define the residual items for the 4-digit classes.The 3-digit group level has been carefully reviewed and revised to reflect the importance of different types of products. A lot of efforts have been made to properly define the residual items for the 4-digit classes.

FAO Proposal for CPC: Creating Sound Groupings (3 of 3) In general, products are classified in CPC based on their physical properties, intrinsic nature, and industrial origin (i.e. Sections 0 and 2);In general, products are classified in CPC based on their physical properties, intrinsic nature, and industrial origin (i.e. Sections 0 and 2); Physical properties and intrinsic nature of products refer to the raw materials of which goods are made, the stage of production or the way in which goods are produced or services rendered, the purpose or user category for which products are intended and the prices at which they are sold; andPhysical properties and intrinsic nature of products refer to the raw materials of which goods are made, the stage of production or the way in which goods are produced or services rendered, the purpose or user category for which products are intended and the prices at which they are sold; and Applying the “demand-side” or “commodity-oriented” marketing concept in the agricultural related products in the new CPC.Applying the “demand-side” or “commodity-oriented” marketing concept in the agricultural related products in the new CPC.

Applying New CPC To World Programme of Agriculture Census 2010; andTo World Programme of Agriculture Census 2010; and To New FAOSTAT Data Collection Questionnaire.To New FAOSTAT Data Collection Questionnaire.

Summary and Conclusion CPC v.2.0 is a watershed in agriculture related statistics;CPC v.2.0 is a watershed in agriculture related statistics; For this achievement, FAO has made an important contribution;For this achievement, FAO has made an important contribution; FAO has been a vanguard for the implementation and application of the new CPC v.2.0; andFAO has been a vanguard for the implementation and application of the new CPC v.2.0; and FAO is continuing to make efforts to coordinate with the HS Review Sub-Committee under the auspices of WCO to review and revise HS in the areas of food, agriculture, and fisheries for the next version of HS 2012.FAO is continuing to make efforts to coordinate with the HS Review Sub-Committee under the auspices of WCO to review and revise HS in the areas of food, agriculture, and fisheries for the next version of HS 2012.