Australian Bureau of Statistics
1301.0 - Year Book Australia, 2002
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 25/01/2002
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UNDERSTANDING AGRICULTURAL EXPORTS DATA
Commodity based data
For exports, the ABS uses the Australian Harmonised Export Commodity Classification (AHECC). The details and descriptions of the statistical codes of the AHECC are identified in the Australian Harmonised Export Commodity Classification (1233.0).
Commodity-based trade data are useful for monitoring changes in levels of trade over time. For example, for a particular commodity, or group of commodities, monthly or yearly data can be compared to provide an accurate picture of changes in the levels of those commodities exported. However, commodity based trade data alone should not be used to measure the complete proportion of agricultural output which is exported. This measure offers no method of calculating the agricultural component in exported processed goods.
In analysing table S4.1, the following points should be noted:
Industry based data
Export data are also available on an 'Industry of origin' basis. The Australian and New Zealand Standard Industrial Classification (ANZSIC) is the standard classification used by the ABS for the presentation and analysis of industry statistics. It provides a framework for classifying businesses to industries according to the predominant activities undertaken by a business.
The classification is used in international merchandise trade statistics to provide an indication only of the industry which is determined to have produced the goods which are exported or imported. This is undertaken by allocating AHECC items to the ANZSIC industry which is considered to have ultimately produced the commodity. Any agricultural commodity that has undergone any form of processing is, under the ANZSIC classification system, coded to the manufacturing industry.
Therefore while raw cows' milk production is classified to the Agricultural ANZSIC Class 0130 'Dairy cattle farming', the sale of pasteurised liquid whole milk would be classified to the Manufacturing ANZSIC Class 2121 'Milk and cream processing'.
In addition, any exported items that have confidentiality restrictions on the publication of value details are not classified to their industry of origin, but are instead included in the category 'Other industries'. In 1997-98, no exported commodity items that would be allocated to agriculture under the 'Industry of origin' classification had confidentiality restrictions, but this is not always the case.
Table S4.2 shows data for exports emanating from agriculture on an 'Industry of origin' basis, and data for production from agricultural holdings classified to those ANZSIC industries. The production data shown for each Agricultural class relate to the total value of agricultural production from holdings that are primarily involved in the activity to which the class relates. For example a holding that is primarily involved in vegetable farming would be classified to the ANZSIC Class 0113, 'Vegetable growing'. The value of production data for that holding which is attributed to Class 0113 includes the value of all agricultural commodities produced by that holding, which may include commodities such as livestock, fruit and other non-vegetable crops. However, the export data for that holding would be classified on an 'Industry of origin' basis and any non-vegetable commodities exported from that holding would be classified to a different ANZSIC class.
S4.2 VALUE OF AGRICULTURAL COMMODITIES PRODUCED AND EXPORTED, by Industry - 1997-98(a)
Table S4.2 suffers from the same limitations as the data in table S4.1, in that a run-down of stocks can influence export levels and only direct agricultural exports are included. It is important to realise that the production and export data in tables S4.1 and S4.2 are derived from the same source, but that table S4.2 is classified on the basis of industry rather than commodity.
Balance of payments exports data
The balance of payments (BOP) exports data are based on international trade statistics, adjusted where necessary for timing, coverage, classification and valuation in order to meet the change of ownership conventions and classification requirements contained in the international statistical standards for BOP statistics. For example, wool exported to stockpile abroad before being sold will be excluded from the BOP when shipped, but included when sold. The ABS publication Balance of Payments and International Investment Position, Australia, Concepts, Sources and Methods 1998 (5331.0) provides a detailed description of balance of payments methods.
The broadest level commodity breakdown for general merchandise goods credits (exports) shown in BOP is 'Rural' and 'Non-rural', followed by more detailed commodity dissections within those groupings. Allocation to these groupings is largely in terms of Section(s) or Division(s) of the Standard International Trade Classification (SITC). This commodity breakdown was adopted by the ABS in the early 1960s in response to user demand.
The category 'rural goods' is broad, and attempts to provide an indication of those exports most closely associated with the agriculture, forestry and fishing industries. For example, while meat and meat preparations, cereal preparations, canned fruit salad and timber boards are all classified as 'rural goods', beverages (including wine) are excluded. Non-rural exports, therefore, can include agricultural production embedded in other products. Because of this, and because of different valuation bases, BOP and production data cannot be directly compared.
Input-output based data
Input-output tables show the flows of inputs into and outputs from each industry for a country's entire production system for a given period. In doing this, input-output tables identify which goods and services are produced by each industry and how they are used (for example goods and services used in the production of more goods and services, or goods and services consumed by final consumers). The tables are based on the principle that the value of the output of each industry can be expressed as the sum of the values of all inputs to that industry, including any profits made. All exports data used in input-output analysis undergo some transformation, including conversion from an f.o.b. basis to a basis of 'basic prices' (for agriculture, basic prices are those received at the 'farm gate'). This has the effect of removing transport and distribution margins, and product taxes, from the export values so that the values are consistent with those received by producers. Similarly, agricultural output is also valued at basic prices in input-output tables.
Input-output tables are produced using the Input-Output Industry Classification (IOIC) and the Input-Output Product Classification (IOPC). These classifications have been specifically developed for the compilation and the application of Australian Input-Output tables. Additional information on input-output tables can be found in Australian National Accounts: Input-Output Tables (5209.0)
Value of exports from an industry
Input-output tables provide a means of tracing flows of goods and services step by step through the production process, and this information can be used to calculate the contribution made by various industries to the final value of a commodity. It is therefore possible to derive the value of the output from the agricultural industry which is embedded in products produced by other industries, and therefore to derive the value of agricultural output contained in exports of these products. This is illustrated in table S4.4.
Table S4.4 shows that $7.9b of agricultural output is exported indirectly through the export of processed products. For example, much food, which is a basic output of agriculture, requires some processing before being exported. From table S4.4 it can be seen that indirect exports from the beef cattle industry ($1.9b) are more than direct exports ($312b). On the other hand, direct exports of grains ($4.0b) are more than indirect exports from the grains industry ($1.3b).
From table S4.4 it can be established, using the input-output approach, that the total value of agricultural production exported directly or indirectly in 1997-98 was $14.5b. It is important to realise that a number of factors, such as run-down of stocks, weather conditions and changes in the availability of export markets, mean that this is a short period on which to make long term judgements on the overall level of agricultural output exported.
In addition, certain basic assumptions apply when analysing both direct and indirect exports estimates calculated using the input-output approach. These are:
Proportion of industry output exported
Estimating the proportion of total agricultural output which is exported adds further complexities.
The simplest approach would be to use the value of production shown in table S4.4 as the denominator. Doing so provides an estimate of approximately 51% for 1997-98. This estimate has been calculated without making any adjustments for agricultural output that is subsequently consumed within the agricultural industry. If such adjustments are made, a similar estimate is derived because, using the input-output approach, the reduction in the value of agricultural output is almost exactly offset by a proportional reduction in the value of indirect exports. However, for certain analyses it may be appropriate to deduct from the estimate of value of production the value of livestock produced for breeding purposes (on the basis that this production is not available for sale until the livestock is slaughtered) and the value of commodities produced for own account consumption (on the basis that this production is not available to the market). If both of these adjustments are made, the proportion of agricultural output that is exported under the input-output approach rises to about 56%.
Embedded commodities approach
This approach estimates the volumes of agricultural commodities contained in indirect exports using factors which calculate the percentage of raw product contained in various processed goods. These volumes are then added to the volumes of direct exports of agricultural commodities. The value of exports for any commodity is derived by multiplying the gross unit value received by farmers for that commodity by the volume of product exported.
When this method is used, production estimates need to be adjusted to remove production used within the agriculture industry, in order to derive the denominator necessary to calculate the proportion of agricultural output that is exported. The denominator can also be adjusted to take account of the value of livestock produced for breeding purposes and commodities produced for own-account consumption. Using this approach, the Australian Bureau of Agricultural and Resource Economics (ABARE), has estimated that the proportion of agricultural output exported in 1997-98 was approximately 65%.
Analysis of data about the exports of agricultural commodities requires an understanding of the concepts, classifications and methodology.
This article illustrates that the value of agricultural output finally exported is very much influenced by the value of agricultural output included in processed exports. For example, table S4.4 shows that, using the input-output approach, the percentage of output exported from the beef cattle industry increases from 8% (direct exports), to 58% (direct and indirect). Equally importantly, this article shows that the assumptions used in defining agricultural output and exports, and the methodologies used to derive these estimates, can also affect results, and users need a basic understanding of these methodologies in order to interpret the data effectively.
Given the variety of methodologies used to estimate exports and production, and the assumptions required to use these methodologies, any estimate of the proportion of agricultural output which is exported will only be an approximation, and should not be interpreted as an exact result. Finally, while this article presents some illustrative estimates in respect of 1997-98, agricultural production and exports of agricultural commodities can vary from year to year, and users are cautioned about making firm conclusions based on only one year's data.
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This page last updated 5 October 2007