Workshop on SDG Indicator 2.a.1, Turin, Italy, March 2018 - Interpreting the indicator
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. 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. 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. 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. 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. 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. 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. 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. AFCAS25, Entebbe, Uganda 13-17 Nov 2017
*For countries with data on Government Expenditures in Agriculture
10. AFCAS25, Entebbe, Uganda 13-17 Nov 2017
*For countries with data on Government Expenditures in Agriculture
11. AFCAS25, Entebbe, Uganda 13-17 Nov 2017
Regional Trends
*For countries with data on Government Expenditures in Agriculture
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
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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. AFCAS25, Entebbe, Uganda 13-17 Nov 2017
Regional Trends
*For countries with data on Government Expenditures in Agriculture
14. AFCAS25, Entebbe, Uganda 13-17 Nov 2017
Regional Trends
*For countries with data on Government Expenditures in Agriculture