1. Price index of Agricultural Output and Input Hana Tubi Idit Ofek CBS February 2012 February 2012

2. 2 The indices goal To estimate the impact of changes in prices on farmers' income from marketed produce (output), and on their expenditures for the purchase of materials, goods, and services (input).

3. 3 Uses of agricultural prices To deflate value series of inputs and outputs in Agriculture, ( to change the presentation of value series from current to constant prices) To calculate the terms of trade in Agriculture according to prices (and not, for example, according to the influence of marketed produce quantities and of technological changes); To update calculations used to determine prices of agricultural produce and policies for provision of subsidies.

4. 4 changes in prices of purchasesproducts and services by farmers, which are required as inputs The Price Index of Input in Agriculture measures changes in prices of purchases of products and services by farmers, which are required as inputs Purpose and Uses The purpose of the index is to provide information on trends in purchase prices of agricultural production. –The index is used as a deflator of nominal values for uses of national accounts. –Indexation - In Israel, most of the financial agreements are protected by indexation. This allows for sharing of risks between the parties. –Research tool for analysts.

5. 5 Products and Services, Prices and Geographical Coverage The Agricultural Input index is an INPUT TOTAL INDEX goods and services Machinery and other equipment, and Tractors andfarm buildings. It includes goods and services currently consumed in agriculture, as well as Machinery and other equipment, and Tractors and farm buildings. We collect prices of domestic and imported goods from domestic manufacturers and distributors. Prices collected from employers refer to wages. The prices do not include VAT. Discounts and credit terms are taken into account.

6. 6 Base Period expenditure for inputs made by farmers over the base year. Weights are determined in a periodic survey, which reflects the expenditure for inputs made by farmers over the base year. Weights are determined for all levels. every 5 to 10 years. Weights are updated every 5 to 10 years. Sources for weights Price index of input in agriculture: Different sources Base Period Base Period: Average 2000

7. 7 Data Collection Computer Assisted Telephone Interviews (CATI), post, e-mail, fax, personal interviews 145 questionnaires, 1100 observations Data Editing Elementary index (observation index): The index is chained from month to month. Upper level Index: From the item price index to the groups of items price index, and up to the total index - Laspeyers formula

8. 8 Data Editing - Index Aggregation Observation Index – Cherry tomato seed Item Index – tomato seed Sub-group Index - Seed for vegetables and field crops Group index - Seed Main Group index - Seed, bulbs and saplings

9. 9 Publication and Dissemination Monthly publications are published on the Internet, and in press releases that accompany press conferences. All Input indices are published in the table “ Index of Input Prices by Groups and Sub-groups ”. Current Updates: Current Updates: For example - revisions of weights are published via the Internet together with other PPI metadata.

10. 10

11. 11

12. 12

13. 13 Agricultural produce that was manufactured during the year. Output includes: marketed produce, home consumption on the farm, changes in livestock inventory, intermediate produce and investment in new plantations and afforestation. Agriculture Output

14. 14 Agriculture Output by Destination Local Consumption Export Local Manufacturing Intermediate produce

15. 15 Data sources Wholesalers and food industry Exporters Marketing boards and production councils Animal Husbandry Organizations and corporations Ministry of Agriculture

16. 16 Price index Price and quantity index Price index paaschelaspeyresFormula Current year2000Base year Only the products in two consecutive years All productsContent

17. 17 Output Price Index - purpose Measure the percent of change over time in revenue obtained for a fixed basket of goods

18. 18 Output Price Index – weights laspeyres Reflect the relative importance of the various kinds of output within the overall output during the base year. The weight is based on the value of output in the base year (2000)

19. 19 Weighting scheme laspeyres 1,000.0GRAND TOTAL 557.9 CROPS – TOTAL 72.8 FIELD CROPS 13.9 Cereals and legumes 3.1 Wheat 0.8 Barley, sorghum, etc. 6.3 Corn on cob 1.3 Peas for canning 2.4 Miscellaneous legumes for grains

20. 20 Output Price Index - calculation Laspeyres formula According to the weighted mean of the quantity of every product marketed at 2000. The indices calculated for products and aggregative means.

21. 21 Indices 2000 weights 20062007200820092010 1,000.0124.8128.6144.2145.3148.0 GRAND TOTAL 557.9132.0134.9149.0153.2158.0CROPS – TOTAL 72.8124.5127.0144.6145.3142.0 FIELD CROPS 13.9133.9136.6137.8152.5144.2 Cereals and legumes 3.1152.0175.2182.6220.9177.4 Wheat 0.8106.2114.5127.9137.4123.9 Barley, sorghum, etc. 6.3144.2134.7130.4144.0145.0 Corn on cob 1.398.7101.190.785.998.1 Peas for canning 2.4111.1117.8128.5127.3131.2 Miscellaneous legumes for grains 34.7128.2126.8140.8139.5146.5 Industrial and oil crops 9.0103.6122.6116.1110.8137.7 Cotton 7.4138.3161.3109.5121.0127.0 Groundnuts 5.5135.1106.1131.0 142.8 Sunflowers 12.8136.7118.7180.5174.0165.6 Spices, medicinal herbs, etc. 24.2113.9121.7153.8149.6134.3 Rough fodder 7.1115.1126.6151.1154.2143.1 Hay 12.6111.9120.7159.5150.7135.3 Green fodder and silage 4.5117.8117.0142.3139.4117.5 Straw

22. 22 Expected challenges Updating the base year Different destination (local, export) Changes in the varieties of agricultural products

23. 23

24. Thanks for your attention