This project is designed to show how with existing statistical data and additional scientific data the role of imports on farmers’ income can be estimated. European Court of Auditors rose the question about the role of imports in the Special Report 01/2016 among other questions.
In order to answer the question the project is split into parts.
Part 1: Description of imports and their usage in German agriculture. This allows to identify goods which are imported for supply with impacts on farmers’ income and others without impacting agricultural incomes. The usage of goods with impacts has to be defined for the next step.
Part 2: Which imported goods in the scope of the Economic Accounts for Agriculture (EAA) are of single or multi-purpose for intermediate consumption in agriculture? Which quantities and values do these goods have?
Part 3: Search for information and data to estimate the impact of imported intermediate goods on agricultural production value. Modelling calculation methods for further use.
Part 4: Comparison with other member states (MS) (including Switzerland (CH)) with data from these MS.
The imported goods have different characteristics and fulfil different purposes. They can be divided into categories. In the first step, the definitions for the categories "competitive, neutral, intermediate" were created.
In the second step, goods in foreign trade were assigned to the CRONOS codes at the level of the eight-digit HS codes. The classification was broken down into products with a use at the level of agriculture and goods with a use in the rest of the economy or trade. Only goods with direct comparability at agricultural level (e.g. cereals) or for use as inputs are included in the further investigation. Other products imported directly from the manufacturing industry remain outside the consideration. Likewise, goods for trade in food goods are excluded. The result is a list of goods that is comparable to the goods in the CRONOS list. The goods in the list are assigned to their property "competitive, neutral, intermediate".
In the next step, the list was supplemented by foreign trade data on volumes and values. The price level of goods was compared with the values of foreign trade. For this purpose, unit values were calculated in the EAA and in foreign trade. The Pearson coefficient was used to determine whether the same behaviour of producer prices and import and export prices can be observed.
In addition, for intermediate goods, further effects on the level of agricultural output were determined or initial steps were taken for follow-up work. Imported animals were calculated up to the share of the production value.
Important information is missing about seeds. A subdivision into pre-basic seed for further propagation and certified seed for direct sowing cannot be made. With the help of experts, parameters for the estimation are to be determined in further steps.
Results so far:
The assignment of HS codes to the CRONOS codes is possible for most products. These products are raw products such as cereals as grain, vegetables, fruit or live animals. As soon as an imported product already includes processing steps, the product cannot be included in consideration.
The distinction between ‘competitive, neutral or intermediate’ is not possible for all products. There are clear classifications for agricultural seeds intended for sowing or for breeding and farmed animals. Products with the characteristic ‘neutral’ are not produced in Germany or are produced in very small quantities. These goods are also clearly assigned to their category.
In the category of competitive goods, there are overlaps between ‘competitive’ and ‘intermediate’. As an example, cereal grains compete with domestically produced cereals in the field of food. At the same time, they can be used as an input for feeding the animals. The HS codes do not distinguish between quality characteristics or uses. A separation of the import quantities into the directions of use requires a much more far-reaching approach. This is based on the domestic demand for a specific use (food, industry, feed). Domestically produced quantities are deducted from domestic demand. Negative residues mean import requirements. Positive residues mean unused quantities from domestic production. These quantities shall be transferred to the next use. The calculation takes place as a cascade from food to feed.
When importing live animals, a distinction is made between breeding animals and farmed animals. The import of farm animals takes effect directly in production. Imported piglets are fattened and sold as slaughter animals. The difference in weight between piglets and pigs for slaughter corresponds to the import-dependent part of production. This method can be used to determine the proportion of import-dependent production in pigs for slaughter. In breeding animals, the reproduction rate over the branch generations is important in the calculation. A breeding sow gives birth to piglets in production. These piglets can be slaughtered as fattening pigs.
The poultry sector is highly specialised. Few companies breed parent animals and give the parent animals to specialized farms for reproduction. These produce chicks for laying hens or fattening animals. These chicks are passed on to egg producers or fattening farms. Germany's foreign trade data show a break in the time series. Therefore, it is not possible to analyse the proportions of imported chicks in egg production and broiler production over a time series. In order to estimate the import-dependent share of production, it is necessary to determine the shares of parent chicks, laying hen chicks and fattening chicks in the total number of imported chicks. This requires further data from the industry, which are not available as statistics.
Further steps are being taken to assess the role of imported seed for sowing. The problem of the analysis of seeds for sowing is as difficult as the analysis in the poultry sector as described before. Foreign trade do not have information about the level of seeds. A distinction between pre-basic seed for further propagation and certified seed for direct sowing is missing. In a next step, experts will be contacted to get more information.
HS-code does not merge with CRONOS-code for all items.
Only unit values are comparable.
Pearson coefficient shows in some cases dependencies between domestic and international prices.
Input-dependency of some parts of agricultural production could be quantified.
First calculation models are established.
More information is provided in the project report.
