Eurostat, the statistical office of the European Union

E1: Agriculture and fisheries

Postal address: Rue Alcide de Gasperi L-2920 Luxembourg LUXEMBOURG

The EU Agricultural Price Indices (API) comprise:

• the index of producer prices of agricultural products (output)
• the index of purchase prices of the means of agricultural production (input)

A price index is a measure of the change in the prices of goods and services either as they leave their place of production or as they enter the production process. A measure of the change in the prices received by domestic producers for their outputs or of the change in the prices paid by domestic producers for their intermediate inputs. Therefore, basically, a price index illustrates how the price of a product or of a basket of products has changed since the base period. The base price of an index is 100 by agreement, meaning that, for instance, an index equal to 110 reflects an increase in the absolute price of 10% and an index equal to 95 a decrease of 5%.

An Agricultural Price Index shows how agricultural revenue and expenditure are influenced by their price component and is therefore connected with Economic Accounts for Agriculture (EAA).

The agricultural price indices may serve various purposes of economic analysis. Indeed, they provide information on trends in producer prices of agricultural products and purchase prices of the means of agricultural production, which facilitates the price comparison:

• between Member States and the European Union as a whole
• among the different products within a Member State or the European Union

Data is collected to disseminate quarterly and annual price indices including the annual early estimates within the Eurostat framework, so that the EU APIs are harmonised according to the EU methodology, described in the “Handbook for EU Agricultural Price Statistics” (Annex1).

However, prices indices cannot express differences between the Member States in terms of absolute agricultural price levels. Furthermore, EU APIs can differ from the indices of agricultural prices published by the national official websites of Member States, as the latter may be computed in respect of different base, formula or field of observation.

The price index items (output and input) are organised in groups, subgroups, classes and subclasses.

To handle the heterogeneity in structure of the national productions, the selection of representative price series belonging to a subgroup is left to the responsibility of Member States.

At the same time, due to the connection with EAA, the API nomenclature is harmonised to the greatest possible extent with the nomenclature of EAA, which is an integral part of the European System of Accounts (ESA). Therefore, Eurostat's general classification of economic activities (NACE) is used for the compilation of price indices. In addition, Eurostat publishes a combined input price index which comprises the index of the prices of goods and services for current consumption in agriculture (input I) and the index of price of goods and services contributing to agricultural investment (input II).

Moreover, the level of detail of the item lists is different as it is based on the data set (quarterly, annual or annual early estimates). However, the final annual price indices are expected to cover all the items where a value exists in the EAA, whereas the annual early estimates are required only for main selected items.

The output price indices cover agricultural goods and services. They include crops, livestock and livestock products.

The input price indices cover agricultural inputs including intermediate consumption of goods and services (fertilisers, pesticides, feed, seed, energy and lubricants, maintenance and repairs, etc.) and gross fixed capital formation related to investments goods (machinery and equipment, farms, buildings, etc.).

The EU APIs are calculated for each Member State on the basis of the Laspeyres formula. The fixed weighting structure is representative of the base year.

The computation of product group indices or an overall index, derived from the various elementary price indices, is based on the reference-weighting scheme. The weighting scheme, in turn, reflects the value of the product sales and the means of production purchases in each country during the base year.

A price index is calculated for a period of several years without being necessary to alter the basket of representative products or the weights, indeed the current EU APIs refer to 2015 base year with almost the same basket of selected items as in 2010. Changes only need to be introduced when the basket products and their relative importance make the basic structure inappropriate.

The producer prices index of agricultural products (output) represents the measure of transaction prices reflecting  revenue  received  by  the  producer  for  goods  and  services  actually sold to customers over a period. The value weight associated to each elementary index of an output product is equal to the value of the sales of this product (exclusive of VAT) over the base period. In the framework of the EU API, the value of sales:

• include the value of production sold to dealers
• include the value of direct sales by farmers of crop products made to other agricultural units;
• include the value of direct sales by farmers on the domestic market
• include the value of direct sales by farmers abroad (direct exports)
• include the value of products processed on the farm, which, except in the case of olive oil and grape must or wine, must be calculated on the basis of the quantities and prices of the raw materials from which they are made
• include the value of product related levies/taxes (other than deductible VAT)
• exclude the value of any monetary compensation received by farmers in respect of the destruction of given quantities of products
• exclude the value of subsidies on products which farmers might have received
• exclude the value of consumption of own produce on agricultural holdings
• exclude the value of products sold from private, non-agricultural gardens
• exclude the value of changes in stock.

Furthermore, the elementary indices of animal prices refer to animals leaving agriculture (slaughter or export) and the weight is calculated as the value of the corresponding sales. Imports of animals are regarded as negligible.

The index of purchase prices of the means of agricultural production (input) is the measure of transaction prices reflecting the expenditure incurred by farmers in purchasing the means of production (goods and services as well as investment goods), including crop products from other agricultural units for intermediate consumption, over a given period.  It is the basic value for calculating the value weights of the input index if it falls in the base period. It includes taxes less subsidies on products (but excludes deductible taxes like deductible VAT).

In the framework of the EU API, it is assumed by convention, that fertilisers and feeding stuffs purchased are used in the same production period and that there are no stocks on farm. Moreover, the field of observation of the input price indices does not cover the whole of the operating expenditure of the agricultural sector.

Concerning the weights used to calculate the aggregate index for Goods and Services contributing to agricultural investment, it accounts for the expenditure incurred by farmers over the base period in purchasing this kind of goods and services.

Prices should be recorded at points which are as close as possible to those of the transactions which the farmer actually undertakes. This means that product prices should be recorded at the first marketing stage so as to best indicate the actual producer prices received by farmers. Similarly the prices paid by farmers for their means of production should be recorded at the last marketing stage, that at which the items arrive on the farm, so as to best indicate the purchase prices paid by farmers.

The transactions of the national farm, as a single holding treating the whole agricultural sector, are represented in the EU APIs.

The EU APIs refer to the Member States at national level.

The Eurostat dissemination database (http://ec.europa.eu/eurostat/data/database) provides the time series referring to the base years, related to 1995, 2000, 2005, 2010 and 2015.From 1995 to 2005, data collection referred to annual and monthly indices.  From 2005, monthly data collection was interrupted, whereas Member States kept providing information on both quarterly and annual indices.

For EU-15 (1995=100), annual indices are available from 1995 to 2003 and monthly indices are available from 1997.

EU-15, EU-25 and EU-27 (2000=100), annual indices are available from 1995 to 2008 and quarterly indices from 2001. While, monthly data are available for EU-15 and EU-25 from 2000 to 2005.

EU-15, EU-25 and EU-27 (2005=100), aggregations are available for annual and quarterly indices from 2005 to 2012.

EU-28 (2010 =100) aggregate annual and quarterly indices are available from 2010 to 2017. For this period, the EU-28 aggregate does not include Estonia.

EU-28 (2015 =100) aggregate annual and quarterly indices are available from 2015 to 2019, including the 28 Member States.

EU-27(2015 =100) aggregate annual and quarterly indices are available from 2015 onwards, including the 27 Member States (without United Kingdom).

The base for APIs is changed every five years with effect from 1970.  Therefore, a rebasing is done for the years ending in "0" and in "5". However, due to technical reasons on data availability, the indices in the latest base years should be made available every five years in the third year following these base years (i.e. years ending in "3" or "8").

In the first time, the old base year is used to calculate the current indices. Then the rebasing exercise consists of:

• Switching from the former base year to the new one for calculation of the new indices
• Calculating back with the new base year the series of indices already delivered.

During the Rebasing exercise, the EU item list may be revised according to the referred indices, i.e. annual, quarterly and early estimate.

The APIs are calculated based on absolute prices.

The reference period is the calendar year for annual indices and the quarter for the quarterly indices.

There is no official regulation. Eurostat gathers data on agricultural prices indices according to what is termed a Gentleman's agreement with the Member States.

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Regulation (EC) No 223/2009 on European statistics (recital 24 and Article 20(4)) of 11 March 2009 (OJ L 87, p. 164), stipulates the need to establish common principles and guidelines ensuring the confidentiality of data used for the production of European statistics and the access to those confidential data with due account for technical developments and the requirements of users in a democratic society.

The APIs flagged by Member States as confidential with "C" are not published or disseminated. However, they are stored in Eurostat production database to compute the EU aggregate indices.

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In line with the Community legal framework and the European Statistics Code of Practice Eurostat disseminates European statistics on Eurostat's website (see item 10 - 'Accessibility and clarity') respecting professional independence and in an objective, professional and transparent manner in which all users are treated equitably. The detailed arrangements are governed by the Eurostat protocol on impartial access to Eurostat data for users.

Quarterly and two Annual indices (early estimates and final ones).

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Results are published in the Statistical book Agriculture, forestry and fishery statistics and in Statistics Explained.

Please consult free data on-line (Internet address: http://ec.europa.eu/eurostat).

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Over the year several revisions were made to the common methodology to be applied by all Member States. The latest version of the methodology is provided by the  Handbook for EU Agricultural Price Statistics. (See annex at the bottom of the page).

During the data validation process, Member States provide information and explanations on data transmitted.

All procedures are documented and applied according to the following phases:

• Data Transmission. Data structure is guaranteed by EDAMIS (Electronic Data Files Administration and Management Information System) which is the data collection system, of forms based on the SDMXml protocol. 
• Data Check and Validation. Data content is checked and validated with the support of an ad-hoc IT tool. Accurate activities of revision and follow-up, to ensure that data meet integrity and aggregation criteria, are carried out by countries and Eurostat.
• Data processing. Data are exported from EDAMIS to the production database, stored in FAME (Forecasting Analysis and Modelling Environment), in order to check and perform currency conversion, price deflator application and EU aggregate indices.
• Data publication. The non-confidential indices are published on Eurostat dissemination database.

At each stage, the data flows are recorded, enabling to trace afterwards the published data.

Eurostat analyses completeness and plausibility of the data transmitted by Member States during data collection, processing and analysis. Eurostat also provides a methodological framework to make data comparable among Member States, which entails structural and content validation.

The whole process comprises a monitoring activity of Eurostat according to the data transmission (quarterly and annually), as well as interactions with countries when issues are identified to be discussed and work them out.

Furthermore, working groups are organised by Eurostat to meet countries and discuss future activities with eventual developments/improvements, present technical documents updates, share good practice and provide data quality assessment.

The main users identified are DG AGRI and International organisations dealing with agricultural producer prices.

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Based on the reference weighting schemes, price indices transmitted should not deviate from the expected result more than a range of + 0.5%.

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Since Eurostat endeavours to keep data as up-to-date as possible, Eurostat and Member States agreed to the price indices transmission with the following deadlines:

• Quarterly price indices: 45 days after the end of the reference quarter
• Annual price indices: 60 days after the end of the reference year
• Annual estimates of price indices: 45 days before the end of the reference year

APIs are published on Eurostat’s database after performing the validation procedures, around 15 days after the transmission deadlines.

The APIs time series are comparable among all Member States due to the adoption of the agreed common EU methodology.

The time series with the same base year can be comparable, and are available annually and quarterly.  However, because of crops seasonality, each quarter has a specific weight, so that quarterly indices can be comparable with the corresponding quarters of different years.

Coherence is assessed during the validation of the weighting schemes by comparing annual weights of the base year with the annual EAA data of the same period.

Several checks are carried out to ensure a horizontal consistency between quarterly and annual data as well as a vertical coherence within the aggregate indices.

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Member States may revise the time series at the time of providing final information for a certain year and/or quarter.

APIs published with flag "P" are expected to be revised and to be updated as soon as the final indices are available.  When the final data are transmitted, the new set of aggregated indices are calculated and published accordingly.

The main sources of agricultural prices used to elaborate the indices are:

• Samples of producers which make direct sales;
• Records of transaction as part of an administrative process;
• Administered prices;
• Enquiries to bodies purchasing or selling the agricultural products or means of production.

In the framework of EU API, the frequency of data collection has changed over time as follows:

• monthly and annual data were collected for 1995=100
• monthly, quarterly and annual data were collected for 2000=100
• quarterly and annual data were collected for 2005=100, 2010=100 and keep being gathered for 2015=100

With regard to the Rebasing exercise, weighting schemes are collected every 5 years.  

Data are collected by EU Member States and transmitted to Eurostat using a standard webForm, via the Eurostat Single-Entry Point (EDAMIS).

The weighting schemes are transmitted to Eurostat by the same way.

The validation process includes the following steps:

• structural validation that ensures the application and adoption of common coding and the item lists
• content validation that checks incorrect values for indices such as zero value, negative values, etc.
• cross-check analysis between weighting schemes and the EAA data
• consistency check between annual and quarterly indices
• integrity check of aggregate indices by detailed to aggregate product category

The weighting schemes are used to calculate the aggregate indices and to compute the indices at EU level.

The Harmonised Consumer Price Index (HICP) is used to deflate the nominal price indices.

Adjustments are applied in case of "missing observations" that occur when price data of an item are not available although the corresponding weight was computed. The following procedures are recommended and mostly followed by the countries:

• repeating the last recorded price. In the case of a high rate of inflation, it may be appropriate to adjust the last recorded price.
• repeating the last recorded price by applying the normal seasonal pattern to it.
• imputing price changes on the basis of prices recorded on other markets for the same product.

With regard to seasonal adjustments, many quarterly series of agricultural prices or price indices show a marked seasonal pattern. However, no seasonally adjusted index is calculated. Discussion is limited to comparisons with the corresponding period (quarter) of the previous year. Annual rates of change are thus calculated, and their interpretation is limited to an evaluation of the development of prices compared to their previous year's level.

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