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1
Improved Methodology for
Estimation of Food Stocks
Philip Abbott
Purdue University
Joint National Workshop on Rice Data for Thailand and
the Philippines
Sukosol Bangkok Hotel, 16-17 December 2013, Bangkok, Thailand
Guidelines for Improved Stocks data
� 2007-08 Food Crisis � Need for better agricultural commodity market information (G8/G20, UNHLTF, International organizations)
� AMIS: Agricultural Market Information System
� Gates Foundation- Bangladesh, India, Nigeria
� Japan project – Thailand, Philippines
� Information on grain and oilseed stocks emerged as a key inadequacy to be addressed
� Annotated outline for Guidelines
� Best practices from literature review
� Issues and recommendations for stocks data
collection
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Why is better stocks data needed?
� Market performance
� Annual carry-out stocks as a determinant of private
market prices
� Policy implementation
� Policy induced disequilibrium resolved by stocks
accumulation or release
� Food security
� Indicator of national availability
� Food aid supplies
� Economic agents, public and private, hold stocks for food security or business objectives
Why agents (farmers, traders, livestock producers,
food processors, etc.) hold stocks
� Local/household food security
� Regional trade and domestic seasonal pricing
� International trade
� Supplies for public distribution and food aid
� Working inventories for livestock producers
and food processors
� Consequence of policy implementation --
incentives to store
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Definitional Issues� Public versus private stocks
� Public stocks may have specific purposes – emergency
reserves, strategic reserves
� Even with public stockpiling, farmers and traders may
hold significant stocks
� Working (pipeline) stocks versus buffer stocks
� Distinction ambiguous to private agents holding stocks
� Annual carry out stocks
� Stocks held when new harvest begins
� Food security across crop years/seasons
� Price stability – stocks link prices across years
Current and Best Practices
� Developed country ag exporters run quarterly
surveys –� US (USDA, NASS), Canada (Statistics Canada)
� Brazil and Australia have run incomplete surveys
� Developing countries – only Philippines to our
knowledge surveys stockholders (monthly)
� FAOSTAT, USDA PS&D, AMIS and most
national governments must rely on estimating
stocks as a residual from food balance or
supply-utilization equilibrium
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Stocks as a residual?� Food balance:
Carry-in stocks + production + imports
= food use + feed use + industrial use, waste, losses and
seed use + exports + carry-out stocks
� Problems with this approach:
� Uses unknown – cannot solve for two unknowns from
one equation
� Both use and stocks are unknown in this equilibrium
� Stocks may be easier to observe than use
� Errors in production, trade, use magnified
� Stocks data a check on availability data
� Seed, waste, loss shares may change over time
Stocks estimate vary widely, but are converging where surveyed
Thailand Philippines
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Where stocks data are reliable (U.S.), they play a
role in private price determination
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Corn
Corn
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Soybeans
Soybeans
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Wheat
Wheat
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Rice
Rice
Fundamental Recommendations
� Better stocks data requires more data
collection!
� If stocks are not surveyed, use should be
� Surveys are needed, separately for both on-
farm and commercial stocks
� Guidelines are developed here to better
estimate stocks based on surveys
� Following observed “best practice” cases
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Guidelines – Annotated Outline
� Introduction/Background – Why measure stocks?
� Overall recommendations - Surveys
� What to measure
� When and how often to measure
� Identifying relevant agents for surveys
� Collection methods and logistics
� Sample strategy and design
� Questionnaires
� Documentation
� Results reporting
Introduction/Background – Why
measure stocks?
� Motivate why stocks data should be
collected, based on data needs of both policymakers and market participants
� Food security policy
� Market (agricultural policy) interventions
� Market performance
� Clarify relevant definitions
� Annual carry-out stocks are the focus here
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Overall recommendations� Issues
� Residual approach not well identified – multiple unknowns
� Residual only identifies changes in stocks
� Errors, unknowns in other components of food balance
� Surveying is costly
� Questions raise sensitivity. Answers may be unreliable
� Who to survey? Public, on-farm and commercial stocks
� Recommendations
� Surveys are preferred to estimating stocks as a residual in food balance equilibrium.
� Both on-farm and commercial surveys should be conducted, separately
� Public stocks reported - detail maintained in stocks composition
� Levels, not just changes reported
� Inconsistencies should trigger improvements in surveying procedures rather than ad hoc data adjustments
� Fallback:
� If stocks surveys of private agents (farmers and commercial storage) are not conducted, the empirical foundations of the residual estimation strategy need to be substantially strengthened.
What to measure � Annual carry-out stocks the objective
� Quantity of a commodity in storage at the specific point in the
crop year when stocks are at their lowest level, coinciding with
the first day of the month when harvest begins.
� Other definitions typically apply to purposes of public stocks
� Ambiguities mean it may be difficult or impossible to identify
which subcategory of stocks (e.g. working stocks or buffer stocks)
a particular stock of grain is held
� Grain, milled rice, processed products reported as grain equivalent (e.g. milled rice equivalent)
� Focus on grains and oilseeds a fallback
� Non-tradeables?
� AMIS a response to inadequate world market information, but
� Where this is an issue (Africa) non-tradeables matter to
consumption substitution
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When and how often to measure � Issues
� Should survey be conducted more than once per year?
� Best practice cases are quarterly, monthly
� Crop year and seasons properly defined
� Calendar year data only if that is a reasonable crop year
� Recommendation
� Surveys should be conducted at the beginning of each crop
year/ season (when harvest begins)
� Stocks surveys need to be done over a few days after the target
date of the survey. This implies use of a short, focused
questionnaire
� Fallback
� More frequent surveying than once per year is desirable, but
monthly surveys not required
Identifying relevant agents for surveys� Issues:
� Agents may include – traders, commercial storage
operators, and end users (food processors, livestock
feeders, etc.)
� Area or list frame? Lists of whom?
� Maintaining lists – e.g. firm entry and exit
� Recommendations
� Lists to insure nationally representative sample
� Agricultural or rural census (household surveys)
� “Census” of Commercial storage operators
� Public records, regulatory filings only starting point,
agency responsible for list maintenance
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Collection methods and logistics� Online (web/email), mail (postal service), telephone,
or interview?
� Online most cost effective, but
� Online response rates low even in developed countries
� Infrastructure for online, telephone and even mail may be
inadequate, so that interviewing is very likely to be required
� Online methods may “leapfrog” mail in developing countries
� Recommendations
� Sequential collection from least to most costly method, as
followed now in best practice cases
� Separate on farm and commercial surveys
� Commercial survey under authority of regulatory agency
� Statistical agencies have experience with surveying
� Methods may differ by agent
Sample strategy and design� Issues for nationally representative samples
� Stratification strategy
� Regional information?
� Storage may occur where crop not grown
� Non-farm households?
� Farms that do not generate marketed surplus?
� Recommendations
� Complete enumeration of large commercial storage entities
and large farms
� Samples of smaller entities
� Models to estimate data when samples taken for smaller agents,
missing observations
� Include samples of agents who hold stocks, whether for food
security or market performance
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Questionnaires� Issues
� Comprehensive survey or target stocks positions?
� In what units of measure? Local or standard?
� Ownership status
� Storage capacity
� Sensitivity: Will farmers or traders reveal stocks information
accurately?
� Recommendations
� Simple questions focusing on stocks on hand at the time
interview is conducted (or report is provided via phone, web or
mail).
� Integrate with limited production survey, not comprehensive
rural household survey
� Learn from experience how to address sensitivities
Documentation, Results reporting
� Even in the “best practices” cases public, thorough
documentation of methods to estimate stocks data were
not publicly available.
� Results now are quickly reported, in detail.
� Recommendations
� Publicly available and complete documentation, including
sampling strategy, survey coverage, questionnaires, timing, and
adjustments/procedures to move from sample results to
population predictions is needed
� For stocks estimates to be useful, reports must be issued quickly
after surveys (less than one month). They should include detail
(public, commercial, on-farm; regional data; etc).
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Fallbacks if Stocks Surveys are not
Implemented
� Fallbacks
� Only commercial storage survey, not on-farm
� Survey use more frequently – at least once per year (food
consumption, feed use, industrial)
� Better empirical basis for “rules of thumb” on seed, waste,
even consumption
� Enhance expertise for in-country analysts who must estimate
food balance
� There are not “best practice” methodologies that extract
better information from non-existent data
� Collecting stocks data may be most cost-effective alternative
Conclusions� Better market information requires better data
collection
� Annual carry-out stocks information important to market performance, policy implementation and food security
� Estimating stocks as a residual in food balance is not a
well identified strategy, likely to lead to errors
� Best practices cases use targeted surveys that
separately measure on-farm and commercial storage
� Cost and sensitivity are limiting factors, but empirical basis for
residual approach requires better data as well, and collecting
stocks data is seen there as most cost-effective
� Fallbacks may result in less ambitious surveys than in current
best practice cases
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Appendices
Data for Thailand and the Philippines
Questions related to surveying stocks in Thailand
Thailand – S&U data comparisons
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Milled Production
AMIS USDA FAO National
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Stock Variation
AMIS USDA FAO National
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Domestic Use
AMIS USDA FAO National
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Exports
AMIS USDA FAO National
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Thailand – Stocks data comparisons
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S/U Based on Total
AMIS USDA FAO Nat ional
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Ending stocks
AMIS USDA FAO National
Thailand – Food balance and price data comparisons
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Philippines – S&U data comparisons
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Milled Production
AMIS USDA FAO National
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Stock Variation
AMIS USDA FAO National
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Domestic Use
AMIS USDA FAO National
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Imports
AMIS USDA FAO National
Philippines – Stocks data comparisons
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S/U Based on Use
AMIS USDA FAO National
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Ending stocks
AMIS USDA FAO National
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Philippines – Food balance and price data
comparisons
Questions related to surveying stocks in
Thailand --Basics� What commodity – Rice
� Which stocks definition?
� Private annual carry-out stocks? Seasonal stocks for multiple crops?
� When to measure stocks?
� Is calendar year the best designation of crop year?
� What is the seasonal pattern of production? How do seasons contribute to variability?
� Is seasonal carry-out useful? Discussed in the Thai market?
� Units of measure? Metric tons, kilograms?
� Questionnaires
� How to ask about stocks to avoid sensitivity?
� Is capacity relevant to agent stockholding?
� Are there any public stocks?
� Do policies induce stockholding?
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Questions related to surveying stocks in Thailand
� Has there been any debate on collecting
stocks data for Thailand?
� Why are data not collected? Expense? Sensitivity
of questions, hence unreliable responses?
� Are food balance estimates generated by the
government? By whom? Are stocks estimated as
a residual?
� Are use estimates made by the Thai government?
How?
� Are exports reported to the government?
Questions related to surveying stocks in Thailand
� Has there been supply chain research to identify actors in rice market, estimating their role, size, etc.?
� Who is believed to hold rice stocks in Thailand? How much do they hold after good years?
� What collection methods are necessary for each agent?
� Farmers must be interviewed? Now done that way for
production survey?
� Might commercial agents reply to internet based
options?
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Relevant agents?
� Subsistence farmers (% of farmers?)
� Commercial farmers
� Small traders (number, % of stocks? Of transactions?)
� Large traders (number, size cut-off, % of stocks?)
� Exporting agents? (number, size cut-off, % of stocks?)
� Transporting agents
� Retail agents (supermarkets, shops)
� Consuming households
� Food processors?
� Feed use/ livestock producers?
Questions related to surveying stocks in Thailand
� Is there private information on the rice
supply chain?
� Do traders or exporters register with government?
Are they regulated? How?
� Are there trade associations? Do they collect data
from members?
� Are exports reported to the government?
� Are differences in export data now due to timing?
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Questions related to surveying stocks in Thailand
� Can the crop cutting (rice production) survey
be expanded to include stocks questions?
� When in relation to harvests is the survey taken?
Is timing useful for stocks estimation?
� Is the sample based on an agricultural census
(conducted how often)? Who is surveyed?
� Are there other questions beyond area, yield
and/or production?