E
ESS/ALSLAC/09/17
November 2009
FAO-OEA/CIE-IICA WORKING GROUP ON AGRICULTURAL AND
LIVESTOCK STATISTICS FOR LATIN AMERICA AND THE
CARIBBEAN
Twenty-fifth Session
Rio de Janeiro, Brazil, 10-12 November 2009
COLLECTING AND COMPILING FOOD AND AGRICULTURAL
PRICES IN LATIN AMERICA AND THE CARIBBEAN: CURRENT
STATUS AND FUTURE DIRECTIONS
I
Introduction
1.
The main objective of this paper is to examine the state of information related to prices of
food and agricultural commodities/products in Latin America and the Caribbean and based on this to
make some recommendations for improving price data systems in the region. Although, the focus of
the examination is on agricultural producer prices only, the recommendations made in the paper could
be extended to price systems in general.
2.
The paper begins by underscoring the critical role of price statistics in the areas of policy and
economic analysis and the key elements that characterize good quality price statistics. The next
section of the paper (section III) briefly describes the main price datasets available in FAO. A
summary of the current status of collecting and reporting food and agricultural prices in Latin
America and the Caribean is provided in section IV. This is done on the basis of an examination of
prices data provided to FAO by countries in the region. Section V of the paper identifies some future
directions that countries in the region can take to enhance their price data systems. The final section
highlights the useful role that FAO can play in support of enhancing price data systems in the region.
II
Key Roles of Food and Agricultural Price Statistics
3.
Price statistics are one of the most important elements in national and international statistical
systems. The significance of price statistics is reflected in their usefulness in many key areas of
national interest. Areas where prices play an important role are discussed below:

Formulation, monitoring and impact assessment of policies: Price statistics are an
extremely useful input in the various stages of a policy cycle – formulation, monitoring
and impact assessment. Price statistics can point to specific areas where policy
interventions may be desired, they help to monitor implementation of policies and assist
in assessing the impact of policy decisions. For example, when countries rely on specific
crops/commodities for food security, the producer or import prices of these
crops/commodities is critical in assessing food security of these countries.

Trade and investment decisions: Information on prices can help influence trade and
investment decisions. For instance, information on prices is useful to multinational
companies seeking to invest in countries with cheaper sources of primary commodities.
Depending on the size of investments, the decisions of these large companies in turn can
influence international trade flows in the respective commodities.

Production planning: Prices of agricultural commodities, processed commodities and
by-products serve as incentives and have a significant influence on formulation of
production plans, such as, switching of production from one commodity to another due to
a higher return at the producer level. The type and volume of agricultural production
activity very much depend on the current market prices of various commodities or
products.

Economic analysis: Price statistics help to indicate the level and direction of economic
growth in a country. They are of considerable use in determining income patterns of
various economic actors in a society. A comparison of price levels at different stages of
the value-chain in different countries and for different commodities helps to understand
the degree of market and product competitiveness. For example, when countries rely on
specific crops for export revenues, the price of these crops is critical in economic growth
of these countries.

Compilation of national accounts: Price statistics help to measure aggregate economic
activity in a country. They help to record the value of domestic output (GDP – national
and sectoral), primary and secondary income flows (GNI), value of international trade,
etc.
4.
In the context of Latin America and the Caribbean, since agriculture is an important means of
livelihood for many countries, prices of food and agricultural products assume great significance,
especially from food security and rural development objectives.
III
Price datasets in FAO
5.
The importance of price statistics is well recognised by FAO and this recognition is mirrored
in the variety of price datasets produced by FAO. For instance, the Statistics Division of FAO collects
and disseminates annual agricultural producer prices for over 200 countries and more than 200
commodities, making FAOSTAT1 the single largest database on producer prices in the world. The
trade domain of FAOSTAT contains import /export quantities and values by country and commodity
1
FAOSTAT – Prices (http://faostat.fao.org/site/351/default.aspx )
2
which are useful for computing trade related prices (unit values). The FAO also provides International
Commodity Prices2 for the major trade commodities on weekly/monthly and annual basis. Having
commodity price data for standard commodities at the various stages in the value-chain provides
countries with the opportunity for detailed price analysis at the country level as well as for cross
country analysis.
6.
The FAO also compiles national basic food prices and disseminates them via the Global
Information Early Warning System – on food and agriculture (GIEWS)3. This dataset provides key
price information specifically useful for food security analysis. Currently, GIEWS contains price data
for 15 countries in Latin America and the Caribbean. The price data are mainly sub-national (a region
or town), relate to specific crops/commodities and are generally retail prices. One weakness of such
datasets however is that they are focused on specific crops for a country at the sub-national level and
do not provide country level data nor the ability for cross-country comparisons of prices.
IV
Current Status of Collecting and Compiling Producer Price Statistics
in Latin America and the Caribbean
7.
As mentioned above, the Statistics Division of FAO disseminates producer prices for food
and agricultural commodities. These prices are collected mainly through questionnaires sent to
national statistical offices or relevant ministries of FAO Member nations, including member nations
in Latin America and the Caribbean. An examination of prices data in FAOSTAT reveals the
following information pertaining to Latin America and the Caribbeann countries:

Number of reporting countries: Of the 31 countries in Latin America and the Caribbean to
whom price questionnaires were sent by FAO in 2008, fourteen (14) reported data, thus
demonstrating an under 50 percent rate of response by the region.

Coverage of data: In 2007, 56 percent of prices data for the Latin America and the Caribbean
region in FAOSTAT was official. This is close to the average size of response from other
regions (excluding Africa, which is less than 30 percent).

Trend of reporting: An analysis of the trend of responses to FAO price questionnaires by
Latin America and the Caribbean countries showed that overall, responses have been erratic.
In other words, there has been no appreciable increase in the number of responses from the
region in the past six years. In fact, the response in the last three years has been less than that
in 2004.
No. of Latin America and the Caribbean countries responding to FAO prices questionnaires
(2002-2008)
2002
2003
2004
2006
2007
2008
18
18
21
10
18
14
Note: FAO did not collect prices in 2005, which also explains the drop in the response rate of 2006.

Metadata: There is a general lack of metadata availability, and methodology used for
collecting prices and estimation is also missing in responses of Latin America and the
Caribbean countries.
8.
The above analysis highlights that almost half of the countries to whom price questionnaires
are sent by FAO do not respond. In addition, only producer prices are reported for only half the
2
International Commodity Prices (http://www.fao.org/es/esc/prices/PricesServlet.jsp?lang=en)
Global Information Early Warning System – on food and agriculture
(GIEWS)(http://www.fao.org/giews/pricetool/)
3
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commodities for which information is sought by FAO. This analysis may point to the constraints
faced by countries in the region with respect to collection and dissemination of data in general, and
prices data in particular. A part of the problem may have to do with the unique characteristics of
prices data. For instance, on the collection side of price data, the frequency of collection, observation
units, sampling technique, observation technique, method of aggregation, etc. can all vary from
product to product. This aspect places high demands on time and resources spent on data collection.
However, since collection of prices data is vital, given their tremendous significance, an outstanding
question remains: are there agricultural price data at country level that are not being disseminated by
countries to FAO?
9.
Some of the possible shortcomings faced by countries in Latin America and the Caribbean
with regards to food and agricultural price statistics and their impacts are outlined below.






V
Lack of adequate resources prevents countries from conducting price data collection, which
may be costly, as outlined above.
In case of missing data, technological and methodological contraints may limit the capacity of
national statistical institutions to address the issue through, for example, use of imputation
techniques.
Even where data is collected, it is not processed and/or reported in a desired form due to lack
of adequately trained technical staff.
There is limited coordination amongst various institutions that generate different types of
price data; this hampers consolidation of various price statistics;
There is insufficient emphasis placed on monitoring quality of data at different stages of price
compilation;
There is a general lack of timely availability of prices data. This limits their usefulness for
policy formulation and analysis especially during emergencies. For instance, a general lack of
timely data on prices in many countries in the region during the episode of soaring food
prices in 2007/08 severely restricted monitoring of the food security situation.
Future Directions for Improving Price Data Systems in Latin
America and the Caribbean
10.
Given the significance of price statistics for food security and agricultural policy making on
one hand and the current state of prices data in Latin America and the Caribbean on the other, there is
an urgent need to improve the price data systems in the region. This paper makes the following
recommendations in this regard:
Improving institutional capacities for prices data collection and dissemination
11.
Given the availability of prices at various levels and therefore the various institutions
involved in management of prices data, networking amongst these institutions becomes crucial (for
example, the Ministry of Agriculture may collect farm gate prices, parastatals may be involved in
collecting wholesale prices while national statistical offices may collect retail prices). In addition,
information networking between government agencies and institutions and the private sector that may
possess information on market prices should also be encouraged. A plan for statistical development of
price statistics should be framed and this should be dove-tailed into the overall national statistical
development plan. Guidelines for the framework could be drawn from the National Strategies for the
Development of Statistics (NSDS) initiative. In the Latin America and Caribbean region several
countries have already produced NSDS.
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The data collection process should be standardised through training for data collectors that
covers principles and best practices of price data collection. In addition, given the vast scope for value
addition in price statistics, there is an urgent need for training staff involved in prices data analysis so
as to enhance their capacities to comprehend user needs and produce relevant information. This will
also require an overall re-orientation and re-balancing of price data systems to focus on user needs,
rather than a supply-driven approach.
12.
Establishing data quality frameworks
13.
Whilst the significance of price statistics is clearly established, their true usefulness depends
on the extent to which they fulfil requirements of data quality. Data quality can be assessed on several
dimensions and hence establishing a framework to assess data quality would depend on the particular
needs and objectives of the national statistical office. The Statistics Division of FAO uses six
parameters to establish quality of prices data. These are: i) Relevance; ii) Accuracy; iii) Timeliness;
iv) Punctuality; v) Coherence; and, vi) Comparability. These quality parameters are equally relevant
at national level as they are at international level and thus can be used as data quality benchmarks by
national statistical offices in Latin America and the Caribbean.
14.
In addition, sound metadata is also an essential prerequisite of any data quality framework. It
helps to ascertain coherence of data and enables users to interpret data correctly. Good quality
metadata should describe various quality aspects of data, for e.g., i) Content aspects describing
concepts, definitions and classifications of variables; ii) Availability aspects describing which
statistical data are available, where they are located, how they can be accessed, etc.; iii) Methods
describing how data were collected.
Enhancing analytical value of prices data
15.
Increased usage of data is beneficial from many perspectives, including for better policy
making, attracting national and donor resources for related work, etc. In order to increase the use and
scope of price statistics, it is important inter alia to enhance the analytical value of the data. There are
several ways in which value could be added to prices data. For instance, compiling prices data for
different levels of the commodity chain (farm gate, wholesale, retail, export) would help in value
chain analysis and in understanding income patterns of different economic actors. Similarly,
constructing price indices will help to understand history of price movement and indicate future
outlook. As an example, compilation of indices of prices received by farmers (output) and prices paid
by farmers (input) helps inform policy decisions related to agricultural sector.
Adopting a product-specific approach to compiling prices data
16.
Ideally, national statistical systems which produce price statistics for the food and agricultural
sector should collect and disseminate prices for all products produced in and traded by the country.
However, given a general lack of resources in many countries, it may not be possible to cover this
scale. To address this issue, countries could adopt a product-specific approach and produce price
statistics for strategic products. The identification of strategic products could be based on the
country’s goals and objectives. Thus, for instance, prices of crops grown by small holders and
subsistence farmers may be important from national food security and rural development objectives,
prices of cash crops may be important from national revenue perspective, and so on. However, whilst
this approach i.e. choosing a set of commodities from a national perspective, may be useful, it could
hamper inter-country comparisons of commodity prices, since different countries will therefore
5
produce data on different commodities or commodities unique to them. Thus, it is pertinent that the
initial list of products should be expanded to include more products as national capacities are
developed and resources are increased.
VI
FAO support for Improving Price Data Systems in Latin America
and the Caribbean
The Statistics Division of FAO has many years of experience in building human and
institutional capacities related to national statistical systems and this expertise could be used to
develop and strengthen price data systems in Latin America and the Caribbean. FAO support could be
enlisted in the areas for improvement outlined above. Specifically, FAO could help Latin America
and the Caribbean countries in developing:
17.

Framework for methodology: FAO could provide assistance to countries in the areas of
collection and processing of price statistics. In addition, assistance could be provided to
harmonise prices data collected from various national sources and from various geographic
locations in the country into standardised forms. Further, technical support could be provided
to countries by subject matter experts from FAO for imputing missing prices data, in line with
international practices. Support in these areas would be provided through training workshops,
handbooks, etc.

Analytical ability: FAO assistance could be sought by countries to facilitate improvement in
the analytical capacity of their price statistics. FAO experts would help countries in compiling
price indices based on international practices, producing secondary indicators, etc.

Data quality framework: The quality framework used by FAO for assessing quality of price
statistics compiled by it could be applied for assessing data quality of food and agricultural
prices produced by national statistical offices and to make them comparable at the
international level. In addition, the FAO ABCDQ project (Agricultural Bulletin Board on
Data Collection, Dissemination and Quality of Statistics) that was established to provide
statistical metadata, on the sources and methods of national agricultural data collection and
dissemination, could be used to frame guidelines for establishment of national metadata
systems.

Forum for partnerships: FAO, with its wide experience and networking, could provide a
forum for exchange of ideas and practices related to price statistics for the development of
food and agricultural statistical systems in Latin America and the Caribbean countries. The
exchanges could take place at the regional level, involving various statistical institutions in
the region, and at the country level, involving national statistical offices and users i.e. policy
makers, analysts, research institutions, business sector, etc.

Platform for integration of national datasets: The FAO CountrySTAT is a national
statistical information system for food and agriculture. The system harmonizes and integrates
national data on food and agriculture coming from different sources into a national dataset
using the standard FAO concepts, definitions etc. The key price data from countries is
collated and disseminated via the national CountrySTAT systems CountrySTAT
(http://www.fao.org/economic/ess/countrystat/countrystathome/en/). For instance,
CountrySTAT is currently being implemented in 21 African countries with a regional version
being implemented for Union Economique et Monétaire Ouest Africaine (UEMOA).
CountrySTAT can provide countries in Latin America and the Caribbean with the framework
to integrate all the country food and agriculture price data into one dataset for improved
analysis and wider dissemination.
6