1. AGRICULTURE TENDENCY INDEX IN INDONESIA: PROGRESS AND CHALLENGES
BPS-Statistics Indonesia
AGRICULTURE TENDENCY INDEX IN INDONESIA: PROGRESS AND CHALLENGES
Third International Seminar on Early Warning and Business Cycle Indicators
17-19 November 2010, Moscow, Russian Federation
(KECUK) SUHARIYANTO
Director of Analysis and Development of Statistics, BPS-Statistics Indonesia

2. INTRODUCTION
Business Tendency Survey (BTS) is aimed to collect prompt information on general tendency of business over the recent past, near future and current situation.
Three organizations has conducted BTS in Indonesia:
BPS-Statistics Indonesia,
Bank of Indonesia,
Danareksa Research Institute (DRI)
They ask some similar variables and produce related indicators, but different in other aspects (methodology, type of variables and period covered).
BPS-Statistics Indonesia has conducted quarterly Business Tendency Survey since 1995  restricted to greater Jakarta area.

3. INTRODUCTION
Started in 2001, BPS has collaborated with Bank of Indonesia  merge the questionnaires, conducted in almost all provinces, cover 9 sectors, number of sample 2500 firms (280 firms in agriculture sector)
Data collection: interview and mailing system, response rate: %.
Sampling method: Stratified sampling with stratification by sectors, regions, and size in term of production, sales or income
The results are released quarterly with the GDP figures  disseminated in website, free of charge ( Since BTS survey contain and business category are parallel with GDP sectors, it is useful to predict the GDP growth

4. VARIABLES USED TYPES OF INDEX VARIABLES
Current Business Tendency Index (CBTI)
1. Business income
2. Production capacity
3. Average working hours
Future Business Tendency Index (FBTI)
1. Domestic order
2. Foreign order
3. Selling price
4. Order for input/raw material
The survey uses qualitative questions asking for an assessment or change of variables. Most questions make use of period of three months.

5. METHODOLOGY
The score is given to each selected variables: “increase”=2, “same”=1, “decrease”=0.
For each variable, calculate total score (TS):
CBTI and FBTI are calculated independently:
CBTI or FBTI
The values of CBTI and FBTI are between 0-200:
BTI > 100: the business condition is better
BTI = 100: the business condition is stagnant
BTI < 100:the business condition is worse

6. Indonesian Economy During Global Crisis
Figure 1. Export, Import and GDP Growth
The impact of global economic and financial crisis in Indonesian economy started in effect in October It was shown by decreasing in exports and import values and GDP growth

7. BTS During Global Crisis
Figure 2. Total BTS, BTS Manufacturing and BTS Agriculture
BTS also decreased in Quarter-4, especially for manufacturing sector.
Third International Seminar on Early Warning and Business Cycle Indicators

8. Comparison of GDP and BTS in Manufacturing Sector. 2006-2010
The BTS and GDP growths in manufacturing sector has similar pattern
Third International Seminar on Early Warning and Business Cycle Indicators

9. Comparison of GDP and BTS in Agriculture Sector, 2007-2010
The BTS and GDP growths in agriculture sector has different pattern, especially in Q1 and Q4.
In Quarter-1, GDP growths are always positive due to high agriculture production (highest harvest season), in Quarter-4 it is always negative
Coverage of BTS is only agriculture firms, coverage of GDP includes agriculture households. In Indonesia, majority of agriculture production, especially food crops, is produced by households.

10. Harvested Area and Production of Rice, 2009
Harvested Area (Million Ha)
Production (Million Tons)
Third International Seminar on Early Warning and Business Cycle Indicators

11. Comparison of GDP and BTS Growths by Sector
Quarter
Quarter
In general, GDP and BTS growth by sector has similar pattern. However, the pattern for agricultural sector is different in Quarter-1 and Quarter-4.

12. CONCLUSION AND FUTURE PLAN
In general, BTS is a good indicator to predict business tendency in Indonesia. However, Agriculture Tendency Index has different pattern with agriculture GDP growth due to different coverage. How do we solve this problem?
FUTURE PLAN
Improvement of methodology:
Increase number of sample and coverage  use the most recent sampling frame. To meet users’ demand, the estimation should be presented until province level.
Questionnaire content and design
Find more appropriate weights used in calculation of the index
Need special method in agriculture sector? More relevant variables for agriculture?
Improvements of data gathering and processing.
Improvements of dissemination of the survey results.

13. Thank You
TERIMA KASIH
Third International Seminar on Early Warning and Business Cycle Indicators

14. Comparison of GDP and BTS Growths 2007-2010
The BTS growth has similar pattern with GDP growth except in Quarter-1.
GDP growth in Indonesia is heavily influenced by agriculture and manufacturing sectors. Their shares to total GDP are 16% and 25% respectively.
In Quarter-1, GDP growths are always positive due to high agriculture production (highest harvest season).