Ministry for Food, Agriculture, Forestry and Fisheries

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Price

Producer price index, consumer price index, export/import price index, index of prices received by farmers and index of prices paidby farmers are provided on a monthly basis.

Producer price index is intended to measure price fluctuation of all merchandise and services traded among manufacturers in the first stage of trade carried out by domestic manufacturers. Consumer price index is intended to measure price fluctuation of all merchandise and services purchased by consumers in the final stage of consumption.

Index of prices received by farmers and index of prices paid by farmers are to figure out fluctuation of both selling price of farmproducts and buying price of all merchandise and services needed for farming and consumption in farm household.

The farm household trade terms index are the percentage figure of the value which shall be calculated by dividing index of prices received by farmer by index of prices paid by farmers. If farm household trade terms index is over 100, it means that price increase of agricultural products exceeds that of goods purchased by farm household and profitability of farm household increase as much. If it is under 100, it implies that price increase of goods and services purchased by farm household exceeds that of farm products and profitability decreases for farm household. The Foreign exchange crisis started in the late 1997 seriously deteriorated the farm household trade terms.

Price Index
Year	Producer Price Index		Consumer Price Index		Rural Price Index		Farm household trade terms
Year		Agricultural, forestry, fishery products		Food	Index of prices received by farmers	Index of prices paid by farmers	Farm household trade terms
1985	66.3	47.0	46.8	42.9	49.8	45.7	109.0
1990	71.2	63.3	60.0	58.7	67.2	59.1	113.7
1995	83.2	86.7	82.3	82.2	91.2	78.4	116.3
2000	100.0	100.0	100.0	100.0	100.0	100.0	100.0
2003	101.4	112.4	110.7	112.4	119.8	114.7	104.4
2004	107.6	112.6	114.7	119.5	116.4	120.3	96.8

Using the Laspeyres formula, the producer price index is revised every 5 years. Producer price index had leveled off at around 3% before 1995. However, it sharply increased due to the price increase of such industrial products as gas products and utilities caused by rapid raise of exchange rate during the crisis in 1998.

Consumer Price Index is based on the store survey conducted in 36 major cities using Laspeyres formula

Since 1987 Consumer Price Index showed a huge increase as a consequence of continuous, rapid economic development and real estate & stock price hike since 1987, but from 1993 it began to relatively level off through the government price stabilization initiative.

However, as a result of rapid rise of exchange rate during the foreign exchange crisis, consumer price index increased, particularly for such imported cereals as corn, flour and bean, of which price hike was as 15% compared to the previous year. Recently, the price of cereals becomes to be relatively stabilized.

Index of prices received by farmers and index of prices paid by farmers indicate that the increase rate of index of prices paid by farmers is far over that of price index received by farmers. Since the foreign exchange crisis, farm household trade terms have rapidly deteriorated because of the relative price increase of industrial products and the increase of wages and charges as a consequence of recent economic recovery. On the other hand, price for rice and other agricultural products remains stabilized overall.

Wages and charges are constantly increasing every year. Increase of wages and charges slowed down in 1988 during the foreign exchange crisis, but afterwards they have been more drastically increasing as the economy recovers.

The recent increase of wages and charges is caused by more job opportunities available in cities thanks to economic recovery.

Accordingly, it leads to lack of labor in rural areas, which in return causes the increase of labor cost for daily workers. Also, getting bigger and more sophisticated, farm machine accelerates the cost increase for purchase or rent.