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Workshop on SDG Indicator 2.a.1, Turin, Italy, March 2018 - Interpreting the indicator

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Workshop on SDG Indicator 2.a.1, Turin, Italy, March 2018 - Interpreting the indicator

  1. 1. Workshop on SDG Indicator 2.a.1; Turin, Italy, 27-28 March 2018 INTERPRETING THE INDICATOR Sangita Dubey, Senior Statistician/Team Leader, FAO Titus Mwisomba, Manager of Agriculture Statistics, Tanzania Bureau of Statistics Giulia Gonnella, Statistician, FAO
  2. 2. INDICATOR 2.a.1 POLICY USE AND INTERPRETATION (1) Consider a country whose central government spends 3.5% of total expenditures, or outlays, on agriculture; and has a sector whose value-added is 3.5% of GDP: 𝑨𝑶𝑰 = 𝐴𝑔𝑟𝑖𝑐𝑢𝑙𝑡𝑢𝑟𝑒 𝑆ℎ𝑎𝑟𝑒 𝑜𝑓 𝐺𝑜𝑣𝑒𝑟𝑛𝑚𝑒𝑛𝑡 𝐸𝑥𝑝𝑒𝑛𝑑𝑖𝑡𝑢𝑟𝑒 Agriculture Value Added as Share of GDP = 3.5 3.5 = 𝟏. 𝟎𝟎 AOI =1 means neutrality in the central government to the agricultural sector relative to agriculture’s economic contribution.
  3. 3. INDICATOR 2.a.1 POLICY USE AND INTERPRETATION (2) Botswana in 2015: central government expenditures of 50.563 billion BWP (Botswana Pula), of which 2.099 was on agriculture; GDP of $14.390 billion, and agriculture Value-Added of $0.312 billion. 𝑨𝑶𝑰 = 𝐴𝑔𝑟𝑖𝑐𝑢𝑙𝑡𝑢𝑟𝑒 𝑆ℎ𝑎𝑟𝑒 𝑜𝑓 𝐺𝑜𝑣𝑒𝑟𝑛𝑚𝑒𝑛𝑡 𝐸𝑥𝑝𝑒𝑛𝑑𝑖𝑡𝑢𝑟𝑒 Agriculture Value Added as Share of GDP = 2.099 50.563 ∗ 100 0.312 14.390 ∗ 100 = = 4.15 2.17 = 𝟏. 𝟗𝟏 AOI >1 means Botswana had a higher orientation by its central government to the agricultural sector relative to agriculture’s economic contribution
  4. 4. INDICATOR 2.a.1 POLICY USE AND INTERPRETATION (3) Guinea-Bissau in 2015: central government expenditures of 86.302 billion XOF (CFA Franc), of which 4.003 was on agriculture; GDP of $0.978 billion, and agriculture Value-Added of $0.433 billion. 𝑨𝑶𝑰 = 𝐴𝑔𝑟𝑖𝑐𝑢𝑙𝑡𝑢𝑟𝑒 𝑆ℎ𝑎𝑟𝑒 𝑜𝑓 𝐺𝑜𝑣𝑒𝑟𝑛𝑚𝑒𝑛𝑡 𝐸𝑥𝑝𝑒𝑛𝑑𝑖𝑡𝑢𝑟𝑒 Agriculture Value Added as Share of GDP = 4.003 86.302 ∗ 100 0.433 0.978 ∗ 100 = = 4.64 44.27 = 𝟎. 𝟏𝟎 AOI <1 means Guinea-Bissau had a lower orientation by its central government to the agricultural sector relative to agriculture’s economic contribution
  5. 5. INDICATOR 2.a.1 POLICY USE AND INTERPRETATION (4) AOI = 1 means a neutral orientation of the central government towards agriculture sector relative to the sector’s contribution to the economy. AOI >1 means a higher orientation of the central government towards the agriculture sector relative to the sector’s contribution to the economy. 𝑨𝑶𝑰 = 4.15 2.17 = 𝟏. 𝟗𝟏 AOI < 1 means a lower orientation of the central government towards the agriculture sector relative to the sector’s contribution to the economy. 𝑨𝑶𝑰 = 3.5 3.5 = 1.00 𝑨𝑶𝑰 = 4.64 44.27 = 𝟎. 𝟏𝟎
  6. 6. INDICATOR 2.a.1 POLICY USE AND INTERPRETATION (5) AOI>1:  “overinvestment” in agriculture;  well developed agricultural and rural infrastructure with diminishing marginal productivity to public investment; and/or  Response to high degrees of market failure relative to other sectors? AOI<1:  “under investment” in agriculture;  poorly developed agriculture and rural infrastructure; o with high returns to public investment; and/or  low degrees of market failure relative to other sectors?
  7. 7. INDICATOR 2.a.1 POLICY USE AND INTERPRETATION (6)  In developing Indicator 2.a.1, FAO also considered the following measures: 1. Level of government expenditures on agriculture: • ignores differences in economic size across countries 2. Share of government expenditure on agriculture: • ignores differences in sector size across countries. 3. AOI using general government expenditures (including state and local) • This ideal measure suffers from severe data collection challenges for state and local government expenditures.
  8. 8. INDICATOR LIMITATIONS • 2.a.1 reflects central government only. • Underestimates AOI if agriculture is disproportionally undertaken by state governments. • AOI=1 may not be the right target for any country • Difference in: degrees of decentralization, market failures; income inequality and food insecurity. • Still provides useful trend analysis, and comparisons between countries with similar agriculture sectors. • FAO to revise regional aggregation methodology • Currently uses cold deck imputation of non-response
  9. 9. AFCAS25, Entebbe, Uganda 13-17 Nov 2017 *For countries with data on Government Expenditures in Agriculture
  10. 10. AFCAS25, Entebbe, Uganda 13-17 Nov 2017 *For countries with data on Government Expenditures in Agriculture
  11. 11. AFCAS25, Entebbe, Uganda 13-17 Nov 2017 Regional Trends *For countries with data on Government Expenditures in Agriculture
  12. 12. AFCAS25, Entebbe, Uganda 13-17 Nov 2017 Regional Trends *For countries with data on Government Expenditures in Agriculture 0.0 0.2 0.4 0.6 0.8 1.0 0 5 10 15 20 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Western Asia and Northern Africa Sub-Saharan Africa Agriculture share of Government Expenditures (left-axis) Agriculture value added share of GDP (left-axis) AOI (right-axis) Sharesinpercent AgricultureOrientationIndex(AOI) WORLDFOODPRICECRISIS WORLDFOODPRICECRISIS
  13. 13. AFCAS25, Entebbe, Uganda 13-17 Nov 2017 Regional Trends *For countries with data on Government Expenditures in Agriculture
  14. 14. AFCAS25, Entebbe, Uganda 13-17 Nov 2017 Regional Trends *For countries with data on Government Expenditures in Agriculture

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