TRADE IN VALUE ADDED OF AGRICULTURAL AND FOOD PRODUCTS · TRADE IN VALUE ADDED OF AGRICULTURAL AND...

TRADE IN VALUE ADDED

OF AGRICULTURAL AND

FOOD PRODUCTS

Pete Liapis (OECD), Marinos Tsigas (USITC) Workshop on Global Value Chains for Food and Nutrition Security, September 26-26, 2014 The views expressed do not necessarily reflect the views of the OECD, the USITC, or any of their individual officials or commissioners

What is Trade in Value-Added (TiVA)?

• A database containing estimates of the value that is added, by country and by industry, in producing goods and services

• Reveals the source of income generated and the economic significance of both exports and imports

• Based on national I-O or supply use tables, linked to bilateral trade flow data

• Currently covers 57 countries, 18 industries, for 1995, 2000, 2005, 2008 and 2009

References: Interconnected Economies: Benefiting from GVCs (OECD, 2013)

Implications of GVCs for Trade, Investment, Development and Jobs (OECD, WTO, UNCTAD, 2013)

2

Agriculture value chains are relatively short

3

1.0

1.5

2.0

2.5

3.0

2009 1995

Index of the number of production stages

Agri-food products have a low foreign value added

content in exports

4 Source: OECD (2013) Interconnected economies

0%

10%

20%

30%

40%

50%

2009 1995

End-Use of Merchandise Trade (BEC)

OECD Trade and Agriculture Directorate 5

BEC code Description Category

41 Capital goods (except transport equipment) Capital 521 Transport equipment, industrial Capital

111 Food and beverages, primary, mainly for industry Intermediate 121 Food and beverages, processed, mainly for industry Intermediate 21 Industrial supplies not elsewhere specified, primary Intermediate 22 Industrial supplies not elsewhere specified, processed Intermediate 31 Fuels and lubricants, primary Intermediate

322 Fuels and lubricants, processed (other than motor spirit) Intermediate 42 Parts and accessories of capital goods (except transport equipment) Intermediate 53 Parts and accessories of transport equipment Intermediate

112 Food and beverages, primary, mainly for household consumption Final goods 122 Food and beverages, processed, mainly for household consumption Final goods 522 Transport equipment, non-industrial Final goods

61 Consumer goods not elsewhere specified, durable Final goods 62 Consumer goods not elsewhere specified, semi-durable Final goods 63 Consumer goods not elsewhere specified, non-durable Final goods

321 Fuels and lubricants, processed, Other

51 Transport equipment, and parts and accessories thereof, Passenger motor cars

Other

7 Not specified not specified

Twelve Agricultural Sectors in GTAP GTAP sector Description 1 pdr Paddy Rice: rice, husked and unhusked

2 wht Wheat: wheat and meslin

3 gro Other Grains: maize (corn), barley, rye, oats, other cereals

4 v_f Veg & Fruit: vegetables, fruit , nuts, potatoes, cassava, truffles,

5 osd Oil Seeds: oil seeds and oleaginous fruit; soy beans, copra

6 c_b Cane & Beet: sugar cane and sugar beet

7 pfb Plant Fibres: cotton, flax, hemp, sisal and other raw vegetable materials used in textiles

8 ocr

Other Crops: live plants; cut flowers and flower buds; flower seeds and fruit seeds; vegetable seeds, beverage and spice crops, unmanufactured tobacco, cereal straw and husks, unprepared, whether or not chopped, ground, pressed or in the form of pellets; swedes, mangolds, fodder roots, hay, lucerne (alfalfa), clover, sainfoin, forage kale, lupines, vetches and similar forage products, whether or not in the form of pellets, plants and parts of plants used primarily in perfumery, in pharmacy, or for insecticidal, fungicidal or similar purposes, sugar beet seed and seeds of forage plants, other raw vegetable materials

9 ctl Cattle: cattle, sheep, goats, horses, asses, mules, and hinnies; and semen thereof

10 oap

Other Animal Products: swine, poultry and other live animals; eggs, in shell (fresh or cooked), natural honey, snails (fresh or preserved) except sea snails; frogs' legs, edible products of animal origin n.e.c., hides, skins and furskins, raw , insect waxes and spermaceti, whether or not refined or coloured

11 rmk Raw milk

12 wol Wool: wool, silk, and other raw animal materials used in textile OECD Trade and Agriculture Directorate 6

Plus Eight Food Sectors

19 cmt Cattle Meat: fresh or chilled meat and edible offal of cattle, sheep, goats, horses, asses, mules, and hinnies. raw fats or grease from any animal or bird.

20 omt Other Meat: pig meat and offal. preserves and preparations of meat, meat offal or blood, flours, meals and pellets of meat or inedible meat offal; greaves

21 vol

Vegetable Oils: crude and refined oils of soya-bean, maize (corn),olive, sesame, ground-nut, olive, sunflower-seed, safflower, cotton-seed, rape, colza and canola, mustard, coconut palm, palm kernel, castor, tung jojoba, babassu and linseed, perhaps partly or wholly hydrogenated,inter-esterified, re-esterified or elaidinised. Also margarine and similar preparations, animal or vegetable waxes, fats and oils and their fractions, cotton linters, oil-cake and other solid residues resulting from the extraction of vegetable fats or oils; flours and meals of oil seeds or oleaginous fruits, except those of mustard; degras and other residues resulting from the treatment of fatty substances or animal or vegetable waxes.

22 mil Milk: dairy products

23 pcr Processed Rice: rice, semi- or wholly milled

24 sgr Sugar

25 ofd

Other Food: prepared and preserved fish or vegetables, fruit juices and vegetable juices, prepared and preserved fruit and nuts, all cereal flours, groats, meal and pellets of wheat, cereal groats, meal and pellets n.e.c., other cereal grain products (including corn flakes), other vegetable flours and meals, mixes and doughs for the preparation of bakers' wares, starches and starch products; sugars and sugar syrups n.e.c., preparations used in animal feeding, bakery products, cocoa, chocolate and sugar confectionery, macaroni, noodles, couscous and similar farinaceous products, food products n.e.c.

26 b_t Beverages and Tobacco products


Exports by Major End-Use Categories:

2007

0

20

40

60

80

100

Agriculture Manufacture

Capital goods Intermediate goods Final consumption

USD 11.7 trillion


USD 923 billion

Agricultural Exports by Major End-Use

Categories: 2007

0

20

40

60

80

100

BULK HORT PROC SEMI

capital goods intermediate goods household consumption

USD 119 b USD 156 b USD 448 b USD 202 b


Aggregate Effects of 1% Increase

in Consumer Demand

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

U.S. EU Japan

Increase in domestic VAother sectors

Increase in domestic VAF&A

Increase in foreign VAother sectors

Increase in foreign VAF&A

$6997 $15181 $3483

OECD Trade and Agriculture Directorate

10

Value Added by Source Country for 1% Increase

US Demand Ag & Food

Domestic and Foreign Split per $1

0

20

40

60

80

100

120

U.S

domestic value added

foreign value added

Foreign Share


11

chn , 11.6

mex , 11.6

can, 17.5

aus, 1.8

tha, 2.1

ind, 2.0

bra, 2.8

chl, 2.0

deu, 3.0

fra, 1.3

uk, 3.0

sau, 2.0

Value Added by Source Country for 1% Increase

Japanese Demand Ag & Food

Domestic and Foreign Split per $1 Foreign Share


12

chn, 18.1

aus, 4.3

can, 3.0

usa, 18.1

deu, 3.6

uk, 2.3

fra, 2.2

sau, 3.4

kor, 2.5

idn, 2.9

bra, 1.8

tha, 2.5

0

20

40

60

80

100

120

140

160

Japan

DomesticVA

ForeignVA

Value Added from $1 increase in

EU_23 Demand for Ag & food

94.147 cents of EU total

fra, 15.03

deu, 19.63

ita, 12.41

gbr, 15.82

esp, 9.86

nld, 5.38 pol,

4.15

grc, 2.87

swe, 2.23

irl, 1.99

bel, 2.62

dnk, 2.16

11.012 cents of EU total

prt, 1.69

cze, 1.79

aut, 1.76

fin, 1.39

hun, 1.27

est, 0.20 lva,

0.73

ltu, 0.70

lux, 0.28

svk, 0.91

slv, 0.30


13

Value Added in Third Countries from $1

Increase in EU demand for Ag & Food

usa, 2.93

chn, 2.46

rus, 1.18 bra, 1.05

jpn, 0.98

nor, 0.77

che, 0.64

ind, 0.59

kor, 0.56

tur, 0.52

can, 0.49 sau, 0.39 aus, 0.35


Foreign Value Added Share of Gross

Exports

00.005

0.010.0150.02

0.0250.03

0.0350.04

0.0450.05

ag

food


Foreign Value Added Share of

Gross Exports

0

0.01

0.02

0.03

0.04

0.05

0.06

ag

food


16


Exports (Fruits Vegetables and Nuts)

-

5

10

15

20

25

30

35

40

Arg

enti

na

Au

stra

lia

Bra

zil

Ca

na

da

Ch

ina

Ger

ma

ny

Den

ma

rk

Sp

ain

Fra

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Gre

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Ind

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Ind

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US

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Exports (Wheat)

0

2

4

6

8

10

12

14

16

18

Arg

enti

na

Au

stra

lia

Bra

zil

Ca

na

da

Ch

ina

Ger

ma

ny

Den

ma

rk

Sp

ain

Fra

nce

Gre

at

Bri

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Ind

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Ind

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Ita

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Mex

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Net

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Zea

lan

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Ph

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Ru

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US

A

Vie

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m

So

uth

Afr

ica



Exports (Dairy)

0

5

10

15

20

25

30

35

40

Arg

enti

na

Au

stra

lia

Bra

zil

Ca

na

da

Ch

ina

Ger

ma

ny

Den

ma

rk

Sp

ain

Fra

nce

Gre

at

Bri

tain

Ind

on

esia

Ind

ia

Ita

ly

Mex

ico

Ma

lay

sia

Net

her

lan

ds

New

Zea

lan

d

Ph

ilip

pin

es

Ru

ssia

US

A

Vie

tna

m

So

uth

Afr

ica



Exports (Beef Meat)

0

5

10

15

20

25

Arg

enti

na

Au

stra

lia

Bra

zil

Ca

na

da

Ch

ina

Ger

ma

ny

Den

ma

rk

Sp

ain

Fra

nce

Gre

at

Bri

tain

Ind

on

esia

Ind

ia

Ita

ly

Mex

ico

Ma

lay

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Net

her

lan

ds

New

Zea

lan

d

Ph

ilip

pin

es

Ru

ssia

US

A

Vie

tna

m

So

uth

Afr

ica



Exports (Vegetable Oils)

0

5

10

15

20

25

30

35

Arg

enti

na

Au

stra

lia

Bra

zil

Ca

na

da

Ch

ina

Ger

ma

ny

Den

ma

rk

Sp

ain

Fra

nce

Gre

at

Bri

tain

Ind

on

esia

Ind

ia

Ita

ly

Mex

ico

Ma

lay

sia

Net

her

lan

ds

New

Zea

lan

d

Ph

ilip

pin

es

Ru

ssia

US

A

Vie

tna

m

So

uth

Afr

ica


An illustration: the Nutella® global value chain

22 Source: Ferrero

THANK YOU FOR YOUR ATTENTION


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