Policy analysis for food and agriculture is an art that is practiced in almost as many different ways as there are practitioners. In its simplest forms, it goes back to biblical times and to corresponding eras in ancient China and India. It is a discipline required in one way or another by all governments. * In the industrialized countries in recent decades, agricultural policy analysis has come to be associated primarily with reviewing protection and subsidy policies, and with the continuing search for new tradeoffs and additional room for maneuver in the conflict of interests between consumers and producers and between domestic and foreign producers. Agricultural research policy also commands increasing interest.
In developing countries, the issues often are more basic: how to generate growth in the incomes of poor farmers, how to ease the burden of food costs for consumers, how to improve the nutritional levels in the lower income groups, how to generate more foreign exchange via agricultural exports or import substitution. Necessarily, the search for acceptable solutions leads into a broad class of questions, such as the functioning of input and factor markets, land tenure, the performance of public institutions, investment and credit allocations, research and extension policy, and trade, pricing and marketing policy. The diversity and complexity of the issues has affected the nature of analyses of the agricultural sector. On the one hand, it has created a demand for qualitative assessments and summary overviews of the sector, to help keep policy makers informed without delving into the details and complexities of the underlying analyses. On the other hand, it has created a demand for more quantitatively sophisticated tools of analysis, to reflect the heterogeneity of the sector and more of its interrelationships, and thus to advance our understanding of how the sector may respond to policy initiatives. In the pursuit of these two divergent approaches, sometimes intermediate approaches are overlooked. In particular, little emphasis tends to be placed on the construction and interpretation of simple economic indicators and coefficients for the sector. Frequently, some of the most basic economic indexes, such as production indexes and inter-sectoral terms of trade, are not calculated', and their possibilities for extension and interpretation are not exploited. The purpose of this paper is to describe systematically a set of simple uses of the more commonly available data series and surveys. They are simple calculations and interpretations that help develop an understanding of the current structure and historical evolution of an agricultural sector and a nation's food supplies, and they often have considerable relevance to policy concerns. Most of them are fairly well known procedures, but some of their extensions and interpretations do not appear to be so well known.
And, surprisingly, for most countries very few of these procedures have been carried out, or at least they are not systematically developed and kept up to date. Examples of the calculations are coefficients of economic protection rates (for more than one year), comparative advantage indicators, indicators of trends in nutrient availability over time, sources-of-growth calculations, and indexes of the purchasing power of farm households. These and the other calculations described are in the nature of descriptive statistics. They are intended to be complements, not substitutes, for more sophisticated quantitative analyses. Often it is useful to carry out some of the simpler calculations first, to help identify the more pressing issues, and then to develop more complex models of those issues. And in many cases, the simpler calculations can be updated at regular intervals, to assist in the monitoring process regarding sector performance. This paper is organized by type of data series, with corresponding discussions of how each series can be used for sector-wide description and analysis, always keeping with the spirit of simplicity and emphasizing economic interpretations. Examples are drawn from recent studies in several countries. The data series range from time series on production, prices, yields and foreign trade to censuses, household surveys, fiscal data, and data on agricultural inputs and costs.
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