METHODOLOGICAL ANNEX 1 SOURCES OF INFORMATION AND METHODOLOGY FOR CALCULATION OF FTA IMPACT

Transcription

1 METHODOLOGICAL ANNEX SOURCES OF INFORMATION AND METHODOLOGY FOR CALCULATION OF FTA IMPACT. Paddy Rice Domesic Prices wihou FTA: Price o producer of green paddy rice. Source FEDEARROZ (he Colombian rice growers federaion) Inernaional prices: Implici FOB expor prices from Unied Saes o he res of he world, for paddy rice in husk (subheading : Rice in he Husk). Source: Foreign Agriculural Service (FAS), Unied Saes Deparmen of Agriculure (USDA). Mariime Freigh: 25 USD per on from US por o Colombian por. Source: FENALCE (he Colombian naional federaion of cereal and legume growers) freighage used in formulas for pariy prices of cereal impors. Por charges: 8 USD per on for por services. Source: FENALCE, charges used in formulas for pariy prices for impor of grain in bulk. Domesic Freigh: Assuming ha he impored produc arrives in zones wih higher paricipaion in he milling indusry, he share of each rice producing zone in milling was calculaed. The daa on rice producion is obained from he rice growing census of 2007 (Censo Arrocero del Año 2007), produced by FEDEARROZ and DANE, o deermine he volume and share in producion of he rice producing zones. Based on consulaions wih expers he following assumpions were made: - All he Coasal zone producion of rice in husk is aken o mills in ha zone - 50% of he producion of he wo deparmens of Sanander (Sanander and Norh Sanander) is processed in he mills of Bucaramanga, and 50% is processed in hose of Cúcua. - 60% of he producion of he Easern plains is processed in he plains area, and 40% in Tolima (cenral zone). - All he producion of he cenral zone is processed in he cenral zone (principally Tolima). - The producion of he lower Cauca area is processed in Córdoba, in Monería and Sahagun. Thus, wih he weighing for producion, and based on he preceding supposiions, he paricipaion of each zone in milling is esablished. Finally, using he freigh cos per on esablished by he Colombian Minisry of Transpor for he year 2009 (Resolución 375 Augus 2008), he average Colombian freighage is calculaed, weighing he freighage from Buenavenura o Ibagué and he

2 Easern plains, and from Barranquilla o he wo deparmens of Sanander and he Alanic coas, by he paricipaion noed. Conversion facors: To ransform he inernaional dry paddy rice price o ha of green paddy rice, he following informaion is used: - The conversion facor for dry o green paddy rice is 84.6%. Tha is: o obain a on of dry paddy rice.8 ons of green paddy rice mus be aken o he mill. Source: double discoun able. - The presen cos of drying and cleaning a he rice mills in Colombia is 40,000 COP per on on average. Source: consulaion wih rice millers of Mea. Domesic prices wih he FTA: I is assumed ha he price wih he FTA will be equal o he ariff free cos of imporing from he Unied Saes, applying he following formula. PTLC ( PFOB FM GP) CS FC In which P FOB is he US FOB world expor price, FM is he mariime freighage, GP is por charges, is he represenaive marke exchange rae, is he domesic freighage, CS is he cos of drying, FC is he conversion facor for dry paddy o green paddy. Supply Funcion: The following models were used o evaluae he response in supply of paddy rice o variaions in he price o producers. These enable he calculaion of he annual volume of producion (Q ), he area culivaed (A ), from he price paid o producers in he previous year (P - ), he area culivaed in he previous year (A - ), and he producion of he previous year (Q - ). Producion: LnQ LnQ LnA LnA Assuming ha, in he long erm, he producion and area are consan given he price, he following long erm funcions are obained: Producion: LnQ LnA By subsiuing he domesic prices wih and wihou FTA in he above funcions he esimaed level of producion and area culivaed is obained for each scenario. Producción: Área: LnQ LnA Source: Ramírez, M.; Marínez, H. (2005), Transmisión de Precios y Efecos en Producción y Consumo. In Garay, Luis Jorge (Direcor), La Agriculura Colombiana Frene al Traado de Libre Comercio con los Esados Unidos. Miniserio de Agriculura y Desarrollo Rural, Bogoá. 2

3 2. Yellow Maize Domesic Prices wihou FTA: Wholesale price of yellow maize in hull, simple average of he values in he four principal ciies of Colombia: Bogoá, Medellin, Cali, and Barranquilla. Source: CCI SIPSA (agriculural price informaion sysem) Inernaional Prices: CIF reference price from he price band for yellow maize (subheading ). Source: SGCAN (General Secreary of he Andean Naions Communiy) Por Charges: 8 USD per on for por services. Source: FENALCE, expenses used in he formulas for impor pariy prices for yellow maize and bulk grains. Domesic Freigh: The daa of he chamber of balanced feeds of he Naional Business Associaion of Colombia ANDI, was used o esablish he naional disribuion of producion of balanced feeds as a proxy for he demand in raw maerials for hese, maize being he main impored raw maerial. The average domesic freighage is calculaed using he freigh cos per on esablished by he Colombian Minisry of Transpor for he year 2009 (Resolución 375 of Augus 2008), weighing he freigh coss from Buenavenura o Bogoá, Medellin and Cali, and from Barranquilla o Bucaramanga and he Alanic Coas region by he paricipaion of hese ceners. Domesic Prices wih he FTA: The price wih he FTA is assumed o be equal o he duy free cos of imporing from he Unied Saes, applying he following formula: PTLC ( PCIF GP) Where P CIF is he CIF reference price from he Unied Saes, GP is por charges, is he represenaive marke exchange rae, and is domesic freighage. Supply Funcion: The following models were used o evaluae he response in he supply of yellow maize o variaions in prices o he producer. These enable he calculaion of he annual volume of producion (Q ), he area culivaed (A ), from he price paid o producers in he previous year (P - ), he area culivaed in he previous year (A - ), he producion of he previous year (Q - ), a variable dummy (D ) which akes he value from he year 970 o 986 and 0 in he remaining years, and anoher variable dummy (D 998 ), ha akes he value of in he year 998 and 0 in oher years. Producion: LnQ LnQ 0.8 D D998 LnA LnA 0.06 D D998 Assuming ha in he long erm he producion and area are consan given he price, he following long erm funcions are obained: Producion: LnQ LnA

4 By subsiuing he domesic prices wih and wihou FTA in he above funcions, he esimaed level of producion and area culivaed is obained for each scenario. I should be noed ha, alhough he supply funcion was esimaed based on he average prices of yellow maize and whie maize, in he case of he exercise calculaing he impac of he FTA, he same funcion is used separaely for each produc wih is corresponding price. Source: Ramírez, M.; Marínez, H. (2005), Transmisión de Precios y Efecos en Producción y Consumo. In Garay, Luis Jorge (Direcor), La Agriculura Colombiana Frene al Traado de Libre Comercio con los Esados Unidos. Miniserio de Agriculura y Desarrollo Rural, Bogoá. 3. Whie Maize Domesic Prices wihou FTA: Wholesale price of whie maize in hull, simple average of he values in he four principal ciies of Colombia: Bogoá, Medellin, Cali, and Barranquilla. Source: CCI SIPSA. Inernaional Prices: CIF reference price from he price band for whie maize (subheading ). Source: SGCAN. Por Charges: 8 USD per on for por services. Source: FENALCE, expenses used in he formulas for impor pariy prices for yellow maize and bulk grains. Domesic Freigh: I was assumed ha he impored produc would arrive a Bogoá and Medellin, 50% a each of hese ciies. Medellin was chosen because he greaer par of he milling indusry for he manufacure of cornmeal rolls (arepas) is here. I is also he ciy of reference for he formaion of he domesic price. The principal indusries of maize and oher derivaes, for example precooked maize flour, are in Bogoá. The average domesic freigh coss are calculaed using he freighage per on esablished by he Colombian Minisry of Transpor for he year 2009 (Resolución 375 of Augus 2008), weighing he freighage from he por of Buenavenura o Bogoá and Medellín by he paricipaion noed above. Domesic Prices wih he FTA: The price wih he FTA is assumed o be equal o he duy free cos of imporing from he Unied Saes, applying he following formula: PTLC ( PCIF GP) Where P CIF is he CIF reference price from he Unied Saes, GP is por charges, is he represenaive marke exchange rae, and is domesic freighage. Supply Funcion: The following models were used o evaluae he response in he supply of whie maize o variaions in prices o he producer. These enable he calculaion of he annual volume of producion (Q ), he area culivaed (A ), from he price paid o producers in he previous year (P - ), he area culivaed in he previous year (A - ), he producion of he previous year (Q - ), a variable dummy (D ) which akes he value from he year 970 o 986, and 0 in he remaining years, and anoher variable dummy (D 998 ), ha akes he value of in he year 998 and 0 in oher years. 4

5 Producion: LnQ LnQ 0.8 D D998 LnA LnA 0.06 D D998 Assuming ha in he long erm he producion and area are consan given he price, he following long erm funcions are obained: Producion: LnQ LnA By subsiuing he domesic prices wih and wihou FTA in he above funcions, he esimaed level of producion and area culivaed is obained for each scenario. I should be noed ha, alhough he supply funcion was esimaed based on he average prices of yellow maize and whie maize, in he case of he exercise calculaing he impac of he FTA, ha funcion is used separaely for each produc wih is corresponding price. Source: Ramírez, M.; Marínez, H. (2005), Transmisión de Precios y Efecos en Producción y Consumo. In Garay, Luis Jorge (Direcor), La Agriculura Colombiana Frene al Traado de Libre Comercio con los Esados Unidos. Miniserio de Agriculura y Desarrollo Rural, Bogoá. 4. Sorghum Domesic Prices wihou FTA: Average price of he ransacions repored in he Naional Agriculural Exchange for sorghum grain. Source: CCI SIPSA Domesic prices wih he FTA: I is assumed ha he price wih he FTA will be equivalen o he price wihou FTA reduced by he percenage change in prices of yellow maize wih he FTA, given he subsiuion of hese wo producs in he composiion of animal feeds. P TLC P OBS ( P MAÍZ AM TLC ) Supply Funcion: The following models were used o evaluae he response in he supply of sorghum o variaions in prices o he producer. These enable he calculaion of he annual volume of producion (Q ), he area culivaed (A ), from he price paid o producers in he previous year (P - ), he area culivaed in he previous year (A - ), he producion of he previous year (Q - ), and a variable dummy (D 998 ), ha akes he value of in he year 998, and 0 in oher years. Producion: LnQ LnQ D998 LnA LnA D998 Assuming ha in he long erm he producion and area are consan given he price, he following long erm funcions are obained: Producion: LnQ. 02 LnA

6 By subsiuing he domesic prices wih and wihou FTA in he above funcions, he esimaed level of producion and area culivaed is obained for each scenario. Source: Ramírez, M.; Marínez, H. (2005), Transmisión de Precios y Efecos en Producción y Consumo. In Garay, Luis Jorge (Direcor), La Agriculura Colombiana Frene al Traado de Libre Comercio con los Esados Unidos. Miniserio de Agriculura y Desarrollo Rural, Bogoá. 5. Whea Domesic Prices wihou FTA: Price arranged by agreemen beween producers and he milling indusry, simple annual average of half yearly prices. Source: IDEMA and Trigonal S.A. Inernaional Prices: CIF reference price from he price band for whea (subheading ). Source: SGCAN. Por Charges: 8 USD per on for por services. Source: FENALCE, expenses used in he impor pariy price formulas for yellow maize and bulk grains. Domesic Freigh: I is assumed ha he impored produc would arrive a he milling cener neares o he producion zone. Thus he producion of he Cundinamarca - Boyacá Savannah, accouning for 20% of naional whea producion, is milled in Bogoá, while he producion of Nariño, accouning for 80% naionally, is milled in Cali. The average domesic freigh coss are calculaed using he freigh cos per on esablished by he Colombian Minisry of Transpor for he year 2009 (Resolución 375 of Augus 2008), weighing he freigh coss from he por of Buenavenura o Bogoá and Cali by he paricipaion noed above. Likewise, he average freighage is calculaed for he domesic produc (from he producion zone o he consumpion zone) weighing he freigh coss from Duiama o Bogoá and from Paso o Cali by he paricipaions noed above. Qualiy Adjusmen Facor: aking ino accoun he fac ha dry domesic whea normally has a humidiy of 5% and 3% of impuriies, while impored whea arrives a he mills wih 3% humidiy and % of impuriies, a qualiy adjusmen facor of 4% is applied for domesic whea (2% for humidiy and 2% for impuriies). Domesic Prices wih he FTA: The price wih he FTA is assumed o be equal o he duy free cos of imporing from he Unied Saes, applying he following formula: P ( P GP) ZP ( FAC) TLC CIF Where P CIF is he CIF reference price from he Unied Saes, GP is por charges, is he represenaive marke exchange rae, is domesic freighage from he por o he consumer zone, FZP is domesic freighage from he producion zone o he consumer zone, and FAC is he qualiy adjusmen facor. 6

7 Supply Funcion: To evaluae he response in he supply of whea o variaions in prices o he producer, he following models were used. These enable he calculaion of he annual volume of producion (Q ), he area culivaed (A ), from he price paid o producers in he previous year (P - ), he area culivaed in he previous year (A - ), and he producion of he previous year (Q - ). Producion: LnQ LnQ LnA LnA Assuming ha, in he long erm, he producion and area are consan given he price, he following long erm funcions are obained: Producion: LnQ LnA The esimaed level of producion and area culivaed is obained for each scenario by subsiuing he domesic prices wih and wihou FTA in he above funcions Source: Ramírez, M.; Marínez, H. (2005), Transmisión de Precios y Efecos en Producción y Consumo. In Garay, Luis Jorge (Direcor), La Agriculura Colombiana Frene al Traado de Libre Comercio con los Esados Unidos. Miniserio de Agriculura y Desarrollo Rural, Bogoá. 6. Beans Domesic Prices wihou FTA: Wholesale price of he Cargamano variey, simple average of he values in he wo principal ciies Bogoá and Medellin. Source: CCI - SIPSA Inernaional Prices: Implici US FOB world expor prices, for Pino beans (subheading : Pino beans (Vigna SPP, Phaseolus SPP), excep seed). Source: Foreign Agriculural Service (FAS), Unied Saes Deparmen of Agriculure (USDA). Pino beans are he variey mos expored by he Unied Saes, and hus may be he bes marke reference for impors under he FTA. The mos similar Colombian variey o he Pino is he Cargamano, which, along wih Radical and Nima Calima, is one of he varieies wih greaer domesic producion. An exercise is also carried ou aking he domesic prices wihou FTA of he Radical variey and comparing hem wih he impor price of Small Red beans from he Unied Saes (subheading : Small Red beans), whose characerisics are similar o Colombian varieies (please see saisical annexes). Mariime Freigh: 70 USD per on from US por o Colombian por. Source: Garay e al Por Charges: 8 USD per on for por services. Source: FENALCE, expenses used in he for impor pariy price formulas for yellow maize and bulk grains. 7

8 Domesic Freigh: I was assumed ha he impored produc would arrive a Bogoá and Medellin, 50% o each, as hese are he ciies wih greaer consumpion of beans in Colombia, and are he references for he domesic price wihou FTA. The average domesic freigh coss are calculaed using he freigh cos per on esablished by he Colombian Minisry of Transpor for he year 2009 (Resolución 375 of Augus 2008), weighing he freigh coss from he por of Buenavenura o Bogoá and Medellín by he paricipaion noed above. Domesic Prices wih he FTA: The price wih he FTA is assumed o be equal o he duy free cos of imporing from he Unied Saes, applying he following formula: PTLC ( PFOB FM GP) Where P FOB is he US FOB world expor price, FM is he mariime freighage, GP is por charges, is he represenaive marke exchange rae, and is domesic freighage. Supply Funcion: The following models were used o evaluae he response in he supply of beans o variaions in prices o he producer. These enable he calculaion of he annual volume of producion (Q ), he area culivaed (A ), from he price paid o producers in ha year (P ), he area culivaed in he previous year (A - ), he producion of he previous year (Q - ), a variable dummy (D ) which akes he value from he year 994 o 997 and 0 in he remaining years, and anoher variable dummy (D 990 ), ha akes he value of in he year 990 and 0 in oher years. Producion: LnQ LnQ 0.8 D D990 LnA LnA D Assuming ha, in he long erm, he producion and area are consan given he price, he following long erm funcions are obained: Producion: LnQ LnA The esimaed level of producion and area culivaed is obained for each scenario by subsiuing he domesic prices wih and wihou FTA in he above funcions,. Source: Ramírez, M.; Marínez, H. (2005), Transmisión de Precios y Efecos en Producción y Consumo. In Garay, Luis Jorge (Direcor), La Agriculura Colombiana Frene al Traado de Libre Comercio con los Esados Unidos. Miniserio de Agriculura y Desarrollo Rural, Bogoá. 7. Poaoes Domesic Prices wihou FTA: Wholesale price of he variey Parda Pasusa (for human consumpion) and R-2 (indusrial consumpion), in Bogoá, given ha he poao indusry is mainly siuaed in Bogoá. Source: CCI - SIPSA 8

9 Inernaional prices: Implici FOB expor prices from Unied Saes o he res of he world, for fresh poaoes (subheading : Poaoes (excep seed) fresh or chilled). Source: Foreign Agriculural Service (FAS), Unied Saes Deparmen of Agriculure (USDA). Mariime Freigh: 35 USD per on from US por o Colombian por. Source: consulaions wih expers. Por charges: 8 USD per on for por services. Source: FENALCE, charges used in pariy price formulas for impors of producs in bulk. Domesic Freigh: I was assumed ha he impored produc would arrive in Bogoá where he greaer par of he poao indusry is siuaed. The average domesic freigh coss from Buenavenura o Bogoá were aken using he freigh cos per on esablished by he Colombian Minisry of Transpor for he year 2009 (Resolución 375 of Augus 2008), Domesic Prices wih he FTA: The price wih he FTA is assumed o be equal o he duy free cos of imporing from he Unied Saes, applying he following formula: PTLC ( PFOB FM GP) Where P FOB is he US FOB world expor price, FM is he mariime freighage, GP is por charges, is he represenaive marke exchange rae, and is domesic freighage. Supply Funcion: To evaluae he response in he supply of poaoes o variaions in prices paid o he producer, he following models were used. These enable he calculaion of he annual volume of producion (Q ), he area culivaed (A ), from he price paid o producers in he previous year (P - ), he area culivaed in he previous year (A - ), and he producion of he previous year (Q - ). Producion: LnQ LnQ LnA LnA Assuming ha, in he long erm, he producion and area are consan given he price, he following long erm funcions are obained: Producion: LnQ LnA The esimaed level of producion and area culivaed is obained for each scenario by subsiuing he domesic prices wih and wihou FTA in he above funcions. Source: Ramírez, M.; Marínez, H. (2005), Transmisión de Precios y Efecos en Producción y Consumo. In Garay, Luis Jorge (Direcor), La Agriculura Colombiana Frene al Traado de Libre Comercio con los Esados Unidos. Miniserio de Agriculura y Desarrollo Rural, Bogoá. 9

10 8. Chicken Domesic Prices wihou FTA: Wholesale price of whole chicken less offal in Bogoá: Source CCI - SIPSA Inernaional prices: CIF reference price from he price band for chicken pieces (subheading ). Source: SGCAN. Por Charges: 5 USD per on plus % of he CIF price, for por services. Source: Garay e al Domesic Freigh: I is assumed ha he impored produc would arrive a Bogoá, boh in order o explain he impac in one of he ciies where his produc is mos consumed, and as i is he ciy of reference for he domesic price. Thus, using he freigh cos per on esablished by he Colombian Minisry of Transpor for he year 2009 (Resolución 375 of Augus 2008) he average domesic freigh coss are aken from Buenavenura o Bogoá. The value calculaed is augmened by 50% due o refrigeraion. Domesic Prices wih he FTA: The price wih he FTA is assumed o be equal o he duy free cos of imporing from he Unied Saes, applying he following formula: PTLC ( PCIF GP) Where P CIF is he CIF reference price from he Unied Saes, GP is por charges, is he represenaive marke exchange rae, and is domesic freighage. Supply Funcion: To evaluae he response in he supply of chicken o variaions in prices paid o he producer, he following models were used. These enable he calculaion of he volume of monhly producion (Q ), from he price paid o he producer of he wo previous monhs (P -2 ), he producion of he previous monh (Q - ), and of 2 monhs previously (Q -2 ), he price of balanced feed in ha monh (PABA ), and a endency (Tend ). LnQ 0.4 ABA 0, LnQ 0.25 LnQ 2 Tend Assuming ha in he long erm he producion is consan given he price, he following long erm funcions are obained: LnQ ABA 0, 006 Tend Also, he presen price of feedsuffs is calculaed as 50% of he price of chicken, wih or wihou he FTA. This supposiion is a resul of he research on cos srucures by FENAVI (he Colombian naional federaion of poulry farmers) and he work carried ou by AGROCADENAS (a websie carrying informaion on agriculural producion chains). 0

11 PABA 0. 5 The esimaed level of producion is obained for each scenario by subsiuing he domesic prices wih and wihou FTA in he above funcion. Annual producion is obained by muliplying his figure by 2. Source: Ramírez, M.; Marínez, H. (2005), Transmisión de Precios y Efecos en Producción y Consumo. In Garay, Luis Jorge (Direcor), La Agriculura Colombiana Frene al Traado de Libre Comercio con los Esados Unidos. Miniserio de Agriculura y Desarrollo Rural, Bogoá. 9. Pork Domesic Prices wihou FTA: Wholesale price of pork in carcass, Bogoá: Source CCI - SIPSA Inernaional prices: CIF reference price from he price band for pork (subheading ). Source: SGCAN. Por Charges: 5 USD per on, plus % of he CIF price, for por services. Source: Garay e al Domesic Freigh: I is assumed ha he impored produc would arrive a Bogoá, boh in order o explain he impac in one of he ciies where his produc is mos consumed, and as i is he ciy of reference for he domesic price. The average domesic freigh coss from Buenavenura o Bogoá are aken using he freigh cos per on esablished by he Colombian Minisry of Transpor for he year 2009 (Resolución 375 of Augus 2008). The value calculaed is augmened by 50% for refrigeraion. Domesic Prices wih he FTA: The price wih he FTA is assumed o be equal o he duy free cos of imporing from he Unied Saes, applying he following formula: PTLC ( PCIF GP) Where P CIF is he CIF reference price from he Unied Saes, GP is por charges, is he represenaive marke exchange rae, and is domesic freighage. Supply Funcion: To evaluae he response in he supply of pork o variaions in prices o he producer, he following models were used. These enable he calculaion of he volume of quarerly producion (Q ), from he price paid o producers during he four previous quarers (P -4 ), he producion of he previous quarer (Q - ), and he price of balanced feed over 5 previous quarers (PABA -5 ). LnQ LnQ 0. ABA 5

12 Assuming ha, in he long erm, he producion is consan given he price, he following long erm funcions are obained: LnQ ABA Also, he presen price of balanced feedsuffs is calculaed as 50% of he price of pork, wih or wihou he FTA. This supposiion is a resul of he research on cos srucures by FENAVI and he work carried ou by AGROCADENAS. PABA 0. 5 The esimaed level of producion is obained for each scenario by subsiuing he domesic prices wih and wihou FTA in he above funcion. Source: Vargas, José Daniel (2007), Respuesa de la Ofera Porcícola en Colombia. Thesis PEG Universidad de los Andes, Bogoá. 2