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defining agro-industrya statistical classification

perspective

Valentina Ramaschiello – ESSFAO-UNIDO Expert Group Meeting on Agro-Industry Measurement (AIM)

FAO, Rome, 24-25 November 2015

overview

• international statistical classifications: an introduction

• how statistical classifications can help us defininig agro-industry

• ISIC

•CPC

•HS

“international languages”* for communicating in statistics (UNSD)

essential mechanisms for the harmonization and coordination of data compilation worldwide

• provide a framework for the collection and analysis of data and for the presentation and comparison of official statistics at international level

• can be used to standardize statistical information, aggregate and disaggregate data sets in a meaningful way

• enable the comparison of national data and indicators with those of other countries at global level, thus

• facilitating the inclusion of countries in global statistical activities and benchmarking of performance

• support policy & decision-making

* UNSD

international statistical classifications

UNSD core features & principles

statistical classifications must be:

• based on a consistent conceptual basis (sound concepts & principles)

• up-to-date, relevant, and adequate to meet users’ needs

• robust enough to last for a period of time

• organized in a flat or hierarchic structure in which categories are mutually exclusive and exhaustive and definitions are clear and unambiguous

• comparable over time, between collections and to other related standard classifications (national or international)

• supported by instructions, manuals, coding indexes, handbooks and trainings to facilitate users

international governance mechanism

Expert Group on International Statistical Classifications• “central coordination body for the current and future

work on classifications that are the responsibility of the UN Statistics Division, and for the coordination and review of other classifications that are the responsibility of other international organizations and that have been proposed for adoption by the Statistical Commission”

• led by UN Statistics Division• Members: IOs, ROs, countries• regularly reports to the UNSC• meets every two years (next meeting in 2017)• technical sub-groups may meet more often or be in

contact by emails, conference calls etc.

International Family of Statistical Classifications

A group of international classifications that:

• fulfils the basic principles and essential criteria of international statistical classifications

• have been reviewed and approved by the UNSC or a similar competent body

• play a role as standard classifications in individual or multiple statistical domains (e.g. economics, labour, health, education, the environment etc.)

The EG is consulted for their maintenance and review.

some relevant schemes in the Family

Economic activities International Standard Industrial Classification of All Economic Activities

Rev.4 (ISIC)

Products (goods & services) Central Product Classification Ver.2.1 (CPC)

Products (trade) Harmonized System 2012 (HS)

Standard International Trade Classification Rev.4 (SITC)

Broad Economic Activities

Extended Balance of Payments Services classification (EBOPS)

ExpendituresClassification of Individual Consumption According to Purpose (COICOP)

ACTIVITIESISIC

• Definition of agro-industry has been on the agenda of the EG in the past in the framework of ISIC revision

– No common position for standard definition was reached

When and who

• developed and adopted in 1948 by the UNSC

• its custodian is the UNSD

Versions

• Currently in use: Rev.4 (2008)

Purpose and applications

• ISIC is applied in various domains: statistical, economic and administrative (e.g. tax collection, business licences)

• Censuses and surveys of industry and economic activities

• SNA

ISIC

ISIC

Structurefollows a four-level structure, with each level marked by a specific alphanumerical code

A - U Section (21)XX DivisionXXX GroupXXXX Class

ISIC

A Agriculture, forestry and fishing

01 Crop and animal production, hunting and relatedservice activities

02 Forestry and logging

03 Fishing and aquaculture

01Includes:

the preparation of products for the primary

markets

02Includes:

forestry activities that result in products that

undergo little processing (fire wood, charcoal, wood chips &

roundwood used in an unprocessed form)

A Agriculture, forestry and fishing01 Crop and animal production, hunting and related service activities

….

016 Support activities to agriculture and post-harvest crop

activities

0161 Support activities for crop production

0162 Support activities for animal production

0163 Post-harvest crop activities

0164 Seed processing for propagation

… Group 016 includes:… post-harvest crop activities, aimed at preparingagricultural products for the primary market and all post-harvest activities aimed at improving the propagation quality of seed

ISIC

http://unstats.un.org/unsd/cr/registry/regcs.asp?Cl=27&Lg=1&Co=C

Section A includes processing on the farm:

– preparation of products for the first market

Section C includes processing in the establishement:

– that can also potentially be done on the farm and/or

– industrial processing activities done with agricultural inputs

ISIC

1. Is Section A included in the definition of agro-industry?

– If yes, to what extent? • All classes?

• Only those related to processing?

• Is hunting and related service activities

2. Does A-I only include agro-food industry? Which activities under manufacturing are to be included?

ISIC: questions (a)

AGRICULTURE, FISHERY &FORESTRY (farm/holding)

MANUFACTURING (establishment)

agro-foodind.

definition #1


C Manufacturing10 Manufacture of food products

(11 Manufacture of beverages)

definition #1 based on ISIC

3. Does agro-food industry include the manufacturing of beverages?

4. Manufacture of food products should be included, but should all of it be? What aboutproducts made from other food products?

5. Is food processing sufficient to describe the sector?

ISIC: questions (b)



agro-foodind.

Production and processing of

products otherthan food

definition #2


C Manufacturing10 Manufacture of food products

11 Manufacture of beverages

12 Manufacture of tobacco products

13 Manufacture of textiles

14* Manufacture of wearing apparel

15* Manufacture of leather and related products

16 Manufacture of wood and of products of wood and cork, except furniture; manufacture of articles of straw and plaiting materials

17 Manufacture of paper and paper products

20 Manufacture of chemicals and chemical products (incl. fertilizers, pesticides, soap & detergents etc.)

21* Manufacture of basic pharmaceutical products and pharmaceutical preparations

22* Manufacture of rubber and plastics products

28 Manufacture of machinery and equipment n.e.c.

31* Manufacture of furniture


6. Ideally we should define A-I only in terms of complete ISIC classes; however this is not always possible:

– Div. 13 includes the manufacture of textiles from both natural and made man fibers

– Div. 14 includes all tailoring, in all materials

– Div. 15 also includes the manufacture of similar products from other materials (imitation leathers or leather substitutes), such as rubber footwear

– Div. 21 does not separate between the manufacture of pharmaceuticals/ medicinal chemical and botanical products

– Div. 31 includes manufacture of furniture of any kind, any material, not only wood

ISIC: questions (c)

7. Is the production of soap, detergent, parfume (2023) derivedfrom agricultural products to be included? If so, also in thiscase there is a problem as in (6.)

8. Div. 17 all stages of paper production? (1701 Manufacture of pulp,

paper and paperboard; 1702 Manufacture of corrugated paper and paperboard and of containers of paper and paperboard; 1709 Manufacture of other articles of paper and paperboard)

9. Similar to (8.), Div. 22 is the production of rubber products tobe included? If yes to what extent? (2211 - Manufacture of rubber

tyres and tubes; retreading and rebuilding of rubber tyres; 2219 -Manufacture of other rubber products)

10. Should the production of inputs be included? (fertilizers2012, pesticides 2021, agricultural machinery 2821)

ISIC: questions (c)

11. Should goods-producing activities or also supportservices be included?

12. How about wholesale/retail sale of agricultural and food items?

ISIC: questions (c)



agro-foodind.



Whole sale & retail

definition #3


C Manufacturing

G Wholesale and retail trade; […]46 - Wholesale trade, except of motor vehicles and motorcycles

462 Wholesale of agricultural raw materials and live animals

463 Wholesale of food, beverages and tobacco

464 Wholesale of household goods

4641 Wholesale of textiles, clothing and footwear

4649 Wholesale of other household goods

Section G includes buyers and cooperative associations engaged in the marketing of farm products




agro-foodind.



Whole sale & retail+ other activities(consutruction, toursim, R&D,

education, etc.)

definition #4

it may include:

• field construction (e.g. agricultural land terracing, drainage, preparing rice paddies etc.) - section F“construction”

• accomodation and restaurant activities related to agriculture (agritourism) - section I “accommodationand food service activities” (551-552, 561)

• agricultural agribusiness education – section P

• agricultural R&D – section M

• other activities e.g.: consultancy and advisory services on banking, finance, legal or extension matters, policy and regulatory and supporting activities of regional, state or federal governments


• how to consider:

– activities for subsitence/home consumption

– the informal sector

• how to identify/classify units that carry out activities in agriculture and manufacturing (i.e. the same unit doing both)?

some other questions

PRODUCTSCPC & HS

What• comprehensive classification of products into a system of categories

that are both exhaustive and mutually exclusive• the term “products” follows the SNA definition, i.e. all output of

economic activities including goods and services• The CPC is highly compatible with the HS and ISIC:

– HS subheadings are used as building blocks for the goods part of the CPC,

– alignment with ISIC is ensured because the CPC classifies products on the basis of the products’ physical properties and intrinsic nature, as well as of the principle of industrial origin (although the products may sometimes be outputs of several ISIC industries)

• The CPC is a general-scope classification but can be customized for sectoral applications

• It is also a general-purpose classification, so that it may be potentially applied in fields ranging from production to trade, prices and consumption

CPC

When and who

• The CPC’s custodian is the UNSD

• The first provisional version was approved by the UNSC in 1991

Version

• The current version in CPC Ver.2.1 (August 2015)

CPC

Structure

• five-level structure, consisting purely of decimal codes

• Ver.2.1 includes an official annex developed by FAO for agricultural statistics, the “CPC expanded for agricultural statistics”:

• additional detail on agricultural commodities (primary products)

• obtained by adding two digits to the lower level

CPC

X SectionXX DivisionXXX GroupXXXX ClassXXXXX Subclass

33

0 Agriculture, forestry and fishery products

1 Ores and minerals; electricity, gas, water

2 Food products, beverages and tobacco; textiles, apparel and leather products

3 Other transportable goods, except metal products, machinery and equipment (includes WASTE)

4 Metal products, machinery and equipment

5 Construction and construction services

6 Distributive trade services; accommodation, food and beverage serving services; transport services; and electricity, gas and water distribution service

7 Financial and related services; real estate services; and rental and leasing services

8 Business and production services

9 Community, social and personal services

01 Products of agriculture, horticulture and market gardening

02 Live animals and animal products (excluding meat)

03 Forestry and logging products

04 Fish and other fishing products

21 Meat, fish, fruit, vegetables, oils and fats

22 Dairy products and egg products

23 Grain mill products, starches and starch products; other food products

24 Beverages

25 Tobacco products

26 Yarn and thread; woven and tufted textile fabrics

27 Textile articles other than apparel

28 Knitted or crocheted fabrics; wearing apparel

29 Leather and leather products; footwear

PRIMARY

PROCESSED

CPC structure

CPC includes under agriculture some productsthat imply a certain degree of processing:

• cotton, ginned

• fibers, retted

How to consider processing on the farm: is itagriculture or agro-industry?

CPC: questions

It also includes under manufacture products that could be producedon the farm:

• nuts, shelled• fruit, dried• spices, ground/powdered• meat (carcass preparation)• fruit and vegetable jams, jellies, puree, pastes, juices• dairy products (cheese, yogurt etc.)• cereal flours• bakery products (bread or pastry-like) • oils• tobacco leaves prepared (cure, stemmed, stripped leaves) & tobaccoproducts (cigars)

Is this agriculture? agro-industry? manufacturing?

CPC: questions

• international trade nomenclature by the WCO

• 5,000 commodity groups classified according to raw or basic material/degree of processing/use/function incl. agricultural, fishery and forestry products, fertilizers, pesticides and machinery

• governed by "The International Convention on the Harmonized Commodity Description and Coding System”(adopted in 1983 and entered into force in 1988), binding to Contracting Parties

HS

Versions

• Version currently in use: 2012 edition

• Previous versions: 1988, 1992, 1996, 2002, and 2007

• Next version: 2017 edition; the discussion of proposals on the 2022 edition is already underway at the WCO

HS

HS is the trade nomenclature most widely used in the world:

• more than 200 countries, territories or customs or economic unions utilize it as the basis for Customs tariffs and for the compilation trade statistics.

• governments, international organizations and the private sector also use it for many purposes e.g.: internal taxes, trade policies, monitoring

of controlled goods, rules of origin, freight tariffs, transport statistics, price monitoring, quota controls, compilation of national accounts, and economic research and analysis

• basis for other international classifications e.g.: SITC, CPC by the UN

variety of applications and users: HS is multipurpose tool

HS: how is it used?

When: review cycle takes place every 5 years

Who: HS Committee (HSC) supported by HS Review Sub-Committee (RSC)

o meet twice a year

o attended by WCO member countries + International Organizations invited to advice on technical issues: consultative role i.e. not voting power but can make proposal to amend the HS

HS: review process

HS Review Sub-Committee

Harmonized System Committee

WCO CouncilFAO is member

of HSC and HS RSC

FAO

FAO

HS: review process

• over 98% of the merchandise in international trade is classified in HS:

o to influence the HS means to significantly impact the availability and quality of trade statistics world wide

• as a multipurpose tool, it is often used also for statistics other than trade and as the basis for other classifications:

o outstanding opportunity for data harmonizationacross countries and different statistical domains

FAO contribution to the HS

8 years

23 meetings

373 new sub-headings (2012+2017)

FAO contribution to the HS

Structure

• six-digit code, arranged in twenty-one Sections and ninety-seven Chapters

• countries can add digits as per their needs

XX ChapterXX.XX HeadingXXXX.XX Subheading

HS

• In the HS, commodities are generally classified according to whether they are made of raw or basic material, but also to the degree of processing undergone and, to a minor extent, their use or function and economic activities.

• However no systematic separation of degree of processing:

HS

• agree on terminology: agro-industry? agribusiness? other?

• define agro-industry:

– draw the boundaries of this sector in terms of activities and products that it covers

– one definition? more than one? multiple definitions to be applied at different-levels (from narrow to broad concept)

how can this group contribute?

• come up with recommendations/guidelines to be shared with UNSD:– ISIC aggregation(s)

– ISIC alternative structure

• ISIC technical sub-group under the EG

• next EG meeting in May 2017

how can this group contribute?

Thank you!

[email protected]

mailto:[email protected]

0 - Agriculture, forestry and fishery products

01 - Products of agriculture, horticulture and market gardening

02 - Live animals and animal products (excluding meat)

03 - Forestry and logging products

04 - Fish and other fishing products

1 - Ores and minerals; electricity, gas and water

16 - Other minerals

CPC Ver.2.1

2 - Food products, beverages and tobacco; textiles, apparel and leather products

21 - Meat, fish, fruits, vegetables, oils and fats22 - Dairy products and egg products23 - Grain mill products, starches and starch products; other food

products24 – Beverages25 - Tobacco products26 - Yarn and thread; woven and tufted textile fabrics27 - Textile articles other than apparel28 - Knitted or crocheted fabrics; wearing apparel29 - Leather and leather products; footwear

CPC Ver.2.1

3 - Other transportable goods, except metal products, machinery and equipment

31 - Products of wood, cork, straw and plaiting materials32 - Pulp, paper and paper products; printed matter and

related articles34 - Basic chemicals36 - Rubber and plastics products38 - Furniture; other transportable goods n.e.c.39 - Wastes or scraps

4 - Metal products, machinery and equipment44 - Special-purpose machinery

CPC Ver.2.1

6 - Distributive trade services; accommodation, food and beverage serving services; transport services; and electricity, gas and water distribution services

61 - Wholesale trade services

63 - Accommodation, food and beverage services

66 - Rental services of transport vehicles with operators

CPC Ver.2.1

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