AMIS: RRF/3-2014/2 AMIS Agricultural Market Information System AGRICULTURAL MARKET INFORMATION SYSTEM THIRD SESSION OF THE AMIS RAPID RESPONSE FORUM Canberra, Australia Thursday, 6 March 2014 AMIS progress and activities: February 2013 to February 2014
EXECUTIVE SUMMARY 1. Following the last meeting of the Rapid Response Forum in February 2013, the AMIS Secretariat continued its efforts to finalize the compilation of historical balances and support countries in the submission of forecast information. This included harmonizing methodologies, integrating national statistics into the AMIS database, and setting up improved online services for the submission and validation of balances. Using these statistics and other resources, the AMIS Market Monitor has evolved into a rich source of information, which now also features analysis from the GEO Global Agricultural Monitoring initiative (GEOGLAM) group. In the area of indicators, the Secretariat consolidated the database of market drivers, for example by expanding the set of variables and automating their update. As for policy indicators, a historical database has been constructed and is currently being modified for integration into a web application. Important progress has also been achieved on research and capacity building projects operated by AMIS. For example, country case studies investigated methodologies for improved feed estimation and analyzed price transmission from global benchmarks to farm gate; follow-up research on food-energy linkages explored possible biofuel indicators; and a global scoping report compiled current knowledge on stocks estimation. In addition, activities in the five target countries receiving capacity development Bangladesh, India, Nigeria, Thailand and the Philippines are gradually commencing. In order to promote dialogue and policy coordination among participating countries, the AMIS Secretariat continued the regular cycle of technical and policy meetings with the Global Food Market Information Group and the Rapid Response Forum, respectively. In the area of capacity development, AMIS also organized a joint workshop on rice statistics with Thailand and the Philippines, and supported a seminar on animal feed resources in the framework of its research activities. Finally, the AMIS Secretariat consolidated its funding situation, with some resource partners now also providing support through a newly implemented financing mechanism: the AMIS Multi Donor Trust Fund. BACKGROUND 2. Established at the request of the G20, the Agricultural Market Information System (AMIS) is an inter-agency Platform to enhance food market transparency and encourage coordination of policy 2 AMIS: RRF/3-2014/2
action in response to market uncertainty. As outlined in the AMIS Terms of Reference, the initiative compiles relevant market and policy information to effectively inform AMIS participating countries and other stakeholders of the market situation and outlook. To the same end, AMIS is engaged in research activities to better understand market developments and identify meaningful indicators to monitor market and policy conditions. In addition, it detects knowledge gaps and technical needs in participating countries and gradually addresses them through capacity strengthening activities. The initiative disseminates its information and analysis through multiple channels, including web and print media, and promotes dialogue and policy coordination through regular meetings with participating countries. This document gives an overview of progress and activities since the last meeting of the Rapid Response Forum in February 2013 as regards the five main outputs of the initiative. Main outputs of AMIS Output 1: Information collection Available information, including both statistical data as well as market and policy drivers, concerning production, utilization, stocks and trade of AMIS crops is collected, evaluated and disseminated. Output 2: Research Relevant methodologies and indicators are developed to monitor and analyze market and policy conditions, and provide improved forecasts and market outlooks. Output 3: Capacity development Capacity of national data producers is strengthened to collect and validate data on production, utilization, stocks and trade of AMIS crops. Output 4: Dissemination Policy makers in AMIS participating countries and other stakeholders are effectively informed of the market situation and outlook, including on relevant policy developments. Output 5: Policy dialogue Dialogue is strengthened among policy makers in AMIS participating countries and other stakeholders in international food markets. AMIS: RRF/3-2014/2 3
INFORMATION COLLECTION Work on supply and demand balances 3. Good progress has been achieved throughout the reporting period as regards the collection of historical supply and demand balances. All countries except one have submitted data, constituting a big improvement compared to the situation last year. However, information on stocks is still missing for two countries that submitted balances while data is of very poor quality for another. Starting in July 2013, national focal points of the Global Food Market Information Group have been requested to regularly provide forecasts for the next marketing season (2013/14), along with information about the methodologies they use to build these forecasts. Progress has been relatively slow, with 16 countries (out of 23 1 ) having sent their forecasts and only six having shared information on underlying methodologies. Among them, Brazil, Canada, the European Union, India, Mexico, the Philippines, the Russian Federation, Ukraine and the United States have supplied the most complete information. In order to accelerate progress, countries have continuously been reminded of AMIS data requirements, including through personal visits of Secretariat members with focal points in capitals. These visits proved highly effective to understand problems in the compilation of national supply and demand balances, and helped in the preparation of improved forecasts. 4. All national balances that have been reviewed by the AMIS Secretariat are now accessible online and can be compared with data from the Food and Agriculture Organization of the United Nations (FAO), the International Grains Council (IGC) and the United States Department of Agriculture (USDA). Such comparison illustrates that differences between the various data sources are small if the information originates from official sources, such as production and trade numbers. Conversely, differences are much larger for elements for which no official data are available, namely domestic utilization and stocks. Moving forward, these elements will require the particular attention of countries and the AMIS Secretariat in 2014. Finally, and as part of the Secretariat s efforts to facilitate data collection from national focal points, great efforts have been placed on developing 1 France, Italy, Germany, Spain, and the United Kingdom do not submit data but are represented through the European Union. 4 AMIS: RRF/3-2014/2
a statistical input tool. Unfortunately, the completion of this tool has taken longer than initially anticipated, but problems are expected to be resolved over the coming weeks. For more information on AMIS work on balances, please refer to AMIS: RRF/3-2014/3. Compiling market and policy indicators 5. Launched at the third Session of the Global Food Market Information Group in Paris (April 2013), the indicator website provides up-to-date market information relevant for AMIS crops. Users can select from a variety of variables, including stocks-to-use ratios, energy prices and ocean freights, which can be visualized and downloaded for further analysis. Apart from continuously expanding available information, activities since the launch of the website have focused on automating the update of data, improving the usability of available online tools, and providing background information on the respective web pages to correctly understand, assess and contextualize the indicators. 6. In addition, a first version of the policy indicators database has been developed. The database contains historical information on six types of policy measures: biofuel policies, export restrictions, export subsidies, import tariffs, tariff quotas, and in-quota tariffs. Data for the first two types of policy measures have been collected by the Organisation for Economic Co-operation and Development (OECD) while data for the latter four were provided by the World Trade Organization (WTO). Since the respective types of policy measures use different classifications and structures, considerable effort has gone into harmonizing the information. Thanks to this work, the database will allow comparisons across countries and commodities and help analyze the impact of policy changes on food price volatility. 7. A prototype of the database was presented at the last Session of the Global Food Market Information Group in Rome (October 2013). Since then, the datasets on export restrictions and biofuel policies have been updated, new information from WTO on tariff quotas and export subsidies has been incorporated, and a first version of a methodology document has been developed. In addition, work has started on designing a web-based application of the database that will allow AMIS participating countries to verify the historical baseline and continuously expand the database with new information. Finalizing and launching this application will constitute a main focus of the work on indicators in 2014. 8. At the same time, AMIS will continue the quest for effective market and policy indicators. AMIS: RRF/3-2014/2 5
As a case in point, the Secretariat is currently exploring the maize/ethanol price ratio to identify threshold levels signalling the profitability of biofuel production, while the combination of global price levels with dollar exchange rates promises a better understanding of the local impact of global price movements. RESEARCH 9. The AMIS Secretariat has been engaged in a range of research activities, including: A review of existing methodologies for the estimation of feed utilization; Country-case studies to better understand price transmission from global benchmarks to farm-gate; Follow-up research on energy-food linkages, e.g. the development of biofuel indicators; Research on stocks estimation, especially in the framework of AMIS capacity development projects. 10. A main component of the feed project has consisted in the preparation of country case studies to assess cereal use for animal feed. Feed utilization is a largely unknown component in supply and demand balances, so improved methodologies to estimate these numbers are of great relevance for AMIS. Following an online survey with livestock experts around the world, studies have been conducted in China, India, Indonesia, Philippines, Thailand, and Vietnam, with the results currently being compiled in a global scoping report (expected to be finalized in March 2014). Given the geographical focus of the country case studies, the project has closely collaborated with the Animal Production and Health Commission for Asia and the Pacific (APHCA), for example during a workshop on Animal Feed Resources and their Management in Bangkok that helped kick-off the country reports (13-15 August 2013). Preliminary results of the country reports have already helped improve a global feed model of FAO s Statistics Division, while a global validation workshop in the second quarter of 2014 will discuss outcomes of the project and present areas of potential future work. 11. Following a suggestion at the last meeting of the Information Group (October 2013), the 6 AMIS: RRF/3-2014/2
AMIS Secretariat commissioned a study to review price transmission from global benchmarks such as the Chicago Mercantile Exchange (CME) to farm-gate. Focusing on six AMIS countries (Argentina, Brazil, China, South Africa, Ukraine and the United States), the study provides insights into: the extent to which prices of local farmers follow CME; the components along the supply chain that facilitate or impede the transmission of prices; and the overall relevance of futures market prices whether global or regional to producer price realization. In this way, the paper offers insights into why certain farmers enjoy high price realization while others seem bound to a persistently low level of income. The study also highlights that price transmission involves a complex set of variables that have evolved from varying paths of agricultural development, including government policy. 12. Building on an analysis of the relationship between prices of crude oil, ethanol and grains, which was published in a paper on Non-linear Cointegration in the Food-Ethanol-Oil System: Evidence from Smooth Threshold Vector Error Correction Models (December 2013), the AMIS Secretariat has continued its analysis of energy-food linkages. With support from USDA, a set of indicators have been identified to monitor profitability of ethanol production from maize. Over the past ten years, the increase in ethanol production in the United States has changed market dynamics in maize and related grain markets, which may impact prices and availability for more traditional grain uses such as food and feed. Keeping a close watch on the potential drivers of ethanol production from maize is therefore of key importance for AMIS, and will continue being a focus of the Secretariat s work in 2014. 13. As evidenced in the regular data transfers from AMIS participating countries, stocks are frequently the least known and most unreliable component of national supply and demand balances. Since its launch in September 2011, AMIS has therefore placed particular emphasis on identifying new methodologies for improved stocks estimation. As part of these efforts, and feeding into the capacity development work in Bangladesh, India and Nigeria, the AMIS Secretariat commissioned a scoping report to examine current and best practices in estimating stocks positions and to develop from that review an annotated outline for a set of guidelines to help countries improve their methodologies. The report emphasizes the desirability of estimating stocks using both commercial and on-farm surveys, conducted separately on an annual or seasonal basis. While several options AMIS: RRF/3-2014/2 7
exist to marginally improve stocks information, the paper finds that any such strategy is almost certainly going to require additional data collection and budgetary expenses. However, in the best practice cases, stocks data collection through regular surveys is seen as the most cost-effective approach. CAPACITY DEVELOPMENT 14. AMIS is currently implementing two capacity development projects: one, financed by the Bill and Melinda Gates Foundation, to strengthen agricultural market information systems in Bangladesh, India and Nigeria through improved methods and digital innovations; another, financed by the Government of Japan, to improve rice statistics in Thailand and the Philippines. Both projects started in late 2012/early 2013 and have a duration of three years. 15. Activities in the Gates-financed project have focused on finalizing the endorsement of target countries, recruiting the project team and preparing future field work. The project includes five main outputs and technical components. Activities on (1) the AMIS Platform and (2) the GIEWS Food Price and Analysis Tool, both independent from target country endorsement, are already being implemented. They have focused on the identification of national focal points, the analysis of previous and ongoing activities in countries that are linked to the objectives of the project, and the adaptation of global IT systems for the implementation at country level. In addition, the GIEWS tool has been expanded to incorporate new data sources. In the area of methodological development, the global review of (3) stocks estimation methods and country practices, already presented under AMIS research initiatives, set the ground for future field activities and the development of methodological guidelines for countries. Progress and open issues are regularly discussed with a small team of experts at FAO. For methodological work on (4) crop forecasting and (5) price estimation, work plans have been developed and are currently being discussed with the target countries. 16. The main focus of the Japan-financed project during its first year of operation has been on analyzing the current situation of rice statistics in Thailand and the Philippines in order to tailor project interventions to local needs. In this context, a status report has been prepared for each country, in collaboration with national counterparts in the Ministry of Agriculture and National Statistics 8 AMIS: RRF/3-2014/2
Offices. Outcomes of this analysis were presented to national stakeholders of both countries in the framework of a joint workshop in Bangkok (16-17 December 2013). The workshop provided an important opportunity to agree on the activities of the project in 2014 and ensure country buy-in as regards the specific objectives to be achieved. It also allowed countries to learn from the experiences of others and exchange lessons learnt. For example, Thailand s experiences in conducting crop cutting surveys offered interesting insights for the Philippines that is currently not engaged in this type of data collection. Conversely, the Philippines elaborate system of estimating stocks offered many ideas for potential improvement in Thailand. DISSEMINATION 17. Since its introduction in September 2012, the AMIS Market Monitor has provided a regular overview of the current market situation and outlook. Apart from supply and demand information, prices and policy developments related to the AMIS crops, the Monitor now also features a contribution from GEOGLAM, the GEO Global Agricultural Monitoring initiative launched by the G20. GEOGLAM provides regular updates on the growing conditions of AMIS crops in the world s major producing regions using satellite imagery, ground observations, and meteorological data. This information has proved a valuable supplement to the Monitor s existing analysis, for example by highlighting crop vegetative growth anomalies. 18. With more market information being featured directly on the AMIS website, the Monitor has also been streamlined in terms of scope and coverage. Specifically, several indicators that are now accessible online are no longer included in the print publication, especially those that get updated frequently. In this way, the Monitor has sharpened its focus on only the main trends and developments in international markets for AMIS crops. 19. Over the next couple of months, the AMIS Secretariat plans to further strengthen its web services, for example by developing an interactive online version of the Monitor. In addition to the regular print publications, users will thus be able to access latest market information and analysis online, featuring many new functionalities to visualize, compare and manipulate data according to their preferences and needs. This process will go hand in hand with an overall assessment of the AMIS: RRF/3-2014/2 9
Monitor s outreach and impact to make the Monitor respond even better to the requirements and expectations of the AMIS target audience. POLICY DIALOGUE 20. In order to promote dialogue and policy coordination among participating countries, the AMIS Secretariat continued the regular cycle of technical and policy meetings. Early in the year, decision-making officials gathered at the World Bank in Washington, DC, for the second session of the AMIS Rapid Response Forum on 20 February 2013. The meeting reviewed overall progress of AMIS and discussed the 2013 work plan. It also adopted a Concept Paper, prepared by the French Ministry of Agriculture and Forestry and outgoing AMIS Chair at the time, that describes the functions and working modalities of the Forum. Most importantly, however, the meeting critically assessed the status of collaboration with country focal points, reminding participants of their agreed commitments to make AMIS a success. This discussion not only created a positive momentum in the lead-up of the Global Food Market Information Group, which met just two months later. It also had a positive, and measurable, impact on strengthening country engagement, as illustrated by the growing number of participating countries that have provided balances information. 21. As for technical meetings, representatives of the Global Food Market Information Group gathered for the first time outside of FAO in a meeting hosted by the OECD in Paris on 23-24 April 2013. Participants shared experiences in establishing supply and demand balances, discussed selected indicators to be monitored on the AMIS website, and assessed various options for improved crop forecasting. Regarding the latter, the meeting started a new and important phase for the work of AMIS, shifting the focus from historical data series to the preparation of short-term forecasts. It also marked the beginning of a successful collaboration with GEOGLAM, which was invited to elaborate with the AMIS Secretariat a monthly contribution to assess the growing conditions of AMIS crops. Outcomes of this work were presented during the subsequent meeting of the Information Group, which was held on 1-2 October 2013 in FAO headquarters. The so-called crop monitor was welcomed as a valuable contribution to the work of AMIS and has since become a regular 10 AMIS: RRF/3-2014/2
feature in the Market Monitor publication. The meeting also included the presentation of a first prototype of the policy database as well as discussions with regional market information systems for possible collaboration with AMIS. 22. Smaller events with AMIS participating countries, including the workshops on feed utilization and rice data collection, have already been mentioned in other sections of the Progress Report. Consolidation of financial resources 23. Adding to existing support, the AMIS Secretariat has consolidated its financial resources during the reporting period. Specifically, France expanded its financial contribution to the Secretariat while the World Bank continued the 2013 support with the release of the second tranche of the Development Grant Facility in January 2014. Both grants will be vital to maintain core functions of the Secretariat, for example the smooth coordination of project activities, the effective management of financial resources, the timely production of the Market Monitor and the continuous improvement of the IT infrastructure of AMIS. In addition, USDA and the International Fund for Agricultural Development (IFAD) provided financial contributions in support of the Secretariat s research activities. 24. Financial assistance to support the Secretariat s work has also been received from the Russian Federation. Resources have been channelled through a new financing mechanism, the AMIS Multi Donor Trust Fund, which will smoothen the administrative process to accept grants. In this way, the trust fund will hopefully encourage other resource partners to provide much-needed assistance to AMIS (for more information on the AMIS Multi Donor Trust Fund, see document AMIS: RRF/3-2014/6). Over the next two years, the funds will particularly be used to strengthen the Secretariat s staffing situation, improve outreach and visibility of key information products, and intensify engagement with participating countries. For the latter, AMIS invites interested national focal points to participate in an exchange programme that will allow them to work with the AMIS Secretariat in FAO headquarters. The exchange programme is expected to significantly increase country ownership and buy-in, which will positively reflect on each country s contributions to the AMIS initiative (for more information, please see document AMIS: RRF/3-2014/5). AMIS: RRF/3-2014/2 11
Calendar of main meetings and events (Feb 2013 to Feb 2014) Feb 2013 Mar 2013 Apr 2013 May 2013 Jun 2013 Jul 2013 Aug 2013 Sep 2013 Oct 2013 Nov 2013 Dec 2013 Jan 2014 Feb 2014 4-5 Steering Committee workshop on market and policy indicators, Paris 8-12 AMIS presentation at Agricultural Outlook Forum, Mexico City 1 Launch of AMIS indicator website 15-22 Bilateral discussions with AMIS focal points during FAO Conference, Rome 8-12 Follow-up workshop on market and policy indicators, Rome 1 New funding from France 1 Start of collaboration with GEOGLAM on AMIS Market Monitor 1-2 4th meeting of Global Food Market Information Group, Paris 1 New funding from United States Dept. of Agriculture 16-17 Joint workshop with Thailand and Philippines on rice statistics, Bangkok 1 AMIS Multi Donor Trust Fund operationally active 10-14 Country mission to AMIS focal points, Djakarta 20 2nd meeting of Rapid Response Forum, Washington, DC 17 AMIS presentation at UNCTAD, Geneva 13-14 Meeting on AMIS data with Intl. Grains Council, London 6-8 Country mission to AMIS focal points, Astana 30 3rd meeting of the AMIS Steering Committee, Rome 18 Diplomacy Barcamp, John Cabot University, Rome 21-28 Country missions to AMIS focal points, Bangkok and Hanoi 31 New funding agreement with the Russian Federation 22-23 AMIS presentation at Agricultural Market Information Network for Mediterranean Countries, Paris 20-22 AMIS presentation at GEOGLAM Planning Meeting 23 2nd meeting of the AMIS Steering Committee, Paris 15-17 APHCA workshop on animal feed resources, Bangkok 27 Start of feed project financed by IFAD 23-24 3rd meeting of Global Food Market Information Group, Paris 12 AMIS: RRF/3-2014/2