Satellite Account for Food Balances

byPratap Narain

Consultant, FAO RomeJuly 2010

Contents

1. Satellite Account for Food Balances (SAFB)?2. Structure of SAFB3. Steps of compilation

a) Sources of data b) Data validationc) Worksheets

4. Concluding remarks

SAFB and SEAFA • SAFB is part of the SEAFA which is based on the SNA• SNA consists of coherent, consistent and integrated

set of macro-economic accounts, balance sheets and tables based on a set of internationally agreed concepts, definitions, classifications and accounting rules.

• Accounts present in a consolidated way a great mass of detailed information, organised according to economic principles and perceptions, about working of an economy

• Primary purpose for compiling the SEAFA is to link socio-economic databases relating to food consumption, labour force, etc. to the accounts for undertaking analytical studies.

Why Satellite Account?The SNA has suggested that satellite accounts may be

compiled for: (a) providing additional information on social concerns

of a functional or cross-sector nature;(b) using complementary or alternative concepts /

classifications and accounting frameworks, when needed to introduce additional dimensions in the accounts;

(c) extending coverage of costs and benefits of human activities;

(d) analysis of data by means of relevant indicators and aggregates; and

(e) linkage of physical data sources and analysis to the monetary accounting system."

Satellite Accounts for Food Balances (SAFB)

SAFB has been establish by: (a)Creating a “food” sector by combining economic activities of crop, livestock, livestock products, minor forest produce and agro-industries production, (b) Establishing linkage between monetary data on expenditure on food with the physical data on quantity of food consumed & nutrient content of food.

The concepts, definitions or classifications used are consistent with the main international statistical systems and standards

Structure of the SAFBThe structure is based on the SNA’s Goods and Services Account.

Supply = Food availability= (commercial production + estimated own account production for self consumption + import + opening stocks) minus (exports + re-export + usage input for processed food + seed + feed + non-food usage + wastage + closing stocks)

Use = Apparent Consumption (Food)

Integrated Account for Private Non-financial Corporate Unit engaged

In crop, livestock, forest, fish & agro-industry

Production & Generation of Income account Household Unit engaged in crop, livestock, forest, fish & agro-

industry

Opening less closing Food balances

Domestic output

Net Imports of food products

Crop & Livestock

Fish

Forest

Agro - industry

Non-food products

Food Products

Rate of Calories per unit of food output

Seed, feed, waste & Other items of intermediate

consumption

Rate of Protein per unit of food output

Rate of Fat per unit of food output

Net availability of food products from domestic production and imports

Apparent Food Consumption in quantity and value terms

Apparent consumption expressed in terms of

Calories, Protein & Fat as well as in terms of quantity of food consumed and

expenditure incurred▬

×

Indicator System – Areas of interest

Data need for compiling SAFB

Data validationCompilation of SABF, like SNA, uses data from different sources. For having reliable results, it is necessary to check their internal consistency and coverage. The task of data validation includes:a)Temporal and cross section checking of primary datab)Consistency at macro-level using SEAFAc)Consistency of quantity & value data of output & input of agro-industries, import, re-export and export data,d)Consistency of quantity and value of input with the quantity and value of output data for agro-industry at meso-level,e)Consistency of quantity with value data of individual items of food in the supply & use framework

Data validationApart from compiling and analyzing economic accounts for agriculture, following approach is adopted to validate other data :Check I: Compile unit value for each item and compare the same with the price data obtained from other sourcesCheck 2: Compare quantity and value of output of agro-industry with the quantity and value of input at 4-digit level to check internal consistencyCheck 3: Compile S-U data for each item and review imputation/correction process to improve intra and inter sector consistency of the data

WorksheetsWorksheets to compile SEAFA and SAFB are divided in four broad groups:Group 1: Workbooks containing base data on crop, livestock, fishery, forest and agro-industry and foreign trade dataGroup 2: Worksheet containing structural data on classification of items of food, wastage rates, trade & transport margins and content of food in terms of energy, protein and fat Group 3: Worksheet presents final validated data on items on food originating from crop, livestock, fishery, agro-industry activities & foreign trade using SAFB codes Group 4: Worksheet to compile the SAFB

Group 1 worksheet• Contains basic data on quantity and value of output

& intermediate consumption as well as data on foreign trade

• Check 1 and 2 are applied to the basic data• Value of output and intermediate consumption are

at purchaser’s prices• Quantities of exports and re-export are subtracted

from quantities of production and import and balance is valued at purchaser’s prices

• Items are assigned ISIC-CPC and HS codes

Group 2 worksheet• A SAFB has been created for all items of food for

human consumption• The list is based on the items of food in the

“Classification of Individual Consumption According to Purpose (COICOP)” and items included in the FAO’s list of “nutrient content of items of food”

• The list covers about 1100 items• The SAFB code classification has 9 main groups, 40

sub-groups and 321 items.• Correspondence has been developed between SAFB

codes with the ISIC_CPC & HS Codes and FAO list

Group 3 worksheet• Worksheet uses SAFB codes aggregated at the

second (sub-group) level of classification showing the 40 items

• Worksheet uses “sum if” function given in the excel sheet

• Includes final validated data on quantity and value (purchaser’s prices) of items on food originating from crop, livestock, fishery, agro-industry activities as well as on items of imports, export & re-export

• Simple totals of each column is checked to verify that all the items have covered and there is no mistake in the coding scheme used

Group 4 worksheet• This worksheet compiles the basic “supply and use”

account taking basic data from the Group 3 worksheet and structural data on trade & transport margin, wastage, non-food use and nutrient content of food using simple arithmetic and “sum if” function

• The worksheet includes apparent consumption in quantity and value terms as well as in nutrient contents

• The data is generated for 40 items and inter-industry consistency is checked using SAU equation. If necessary imputation and correction are reviewed

• Final data are aggregated in 9 main group to present SAFB

Concluding remarksThe SAFB data (a)Are based on establishment approach in comparison to

FBS data which are based on individual items of food products providing additional possibilities for improving reliability

(b)Uses “Classification of Individual Consumption According to Purpose (COICOP)” and hence can be directly compared with the data on consumption expenditure of households, if available from independent survey,

(c)SAFB data are available in terms of quantity consumed, value of quantity consumed and in terms of nutrients. This makes the data more useful for dynamic analysis.

Concluding remarksFrom the SAFB data it is also feasible to have • Clear views of import dependence for each category of

food products• Production efficiency of different classes of

establishments (i.e. household, private corporate sector and public sector).

The SAFB data are likely to be more realistic as the system uses latest available inter-industry coefficients instead of fixed format of commodity tree as used by FBS.