The provision of the food sector is characterized, naturally, by a different structure from that which determined flows to the agricultural sector. Chart 4.7 presents the structure of flows of goods and services addressed to four selected countries. These countries were selected in terms of showing some similarities on the one hand, and differences between individual countries on the other.
Chart 4.7. Branch structure of material supply of food industry in the UK, Austria, Australia and Poland in 2014
Source: own elaboration based on WIOD.
The sectors of agriculture and the food sector itself are included in the two sectors, from which the flows with the greatest share in the supply of the entire food sector are directed. Only in the case of several countries included in the WIOD database (including Luxembourg, Malta, Croatia), this share in 2014 was lower than 45%. In most cases, it ranged from 45 to 60%. The highest was for the Dutch food industry (70.2%). It is worth adding that in the aspect of the dominant role of agricultural flows and the food sector, 2014 was not exceptional.
Among the other branches of the economy, the most important - in the context of food industry supplies - includes wholesale trade, transport and ser-vices. Considering the supply structure of the food industry in the four countries highlighted in the chart, it is worth noting the low share of flows from the agri-cultural sector and the high share of food industry flows ĺ the food industry, as well as the high share of the value of financial services flow in the case of the Great Britain. Austria, in turn, is characterized by a high share of transport ser-vices and those included in the scope of the aggregate Serser-vices in general supply of the food sector. In contrast, the Australian food industry is characterized by a high share of raw material flows from the agricultural sector.
The situation related to the Polish food sector to the largest extent corre-sponds to the global average referring to the material supply of the food indus-try. The detailed structure of this supply for 2014 is presented in Chart 4.8. We
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Poland Australia Austria United Kingdom
Agriculture Mining Food industry Clothing, paper Energy resources Fertilizers, chemicals Metals, electrics Machines, cars Energy, water Architecture
Cars Wholesale Detail Transport Hotels
Finances Services Veterinary Rent Other
can observe here the key importance of raw material flows from agriculture (35.9%) and processed goods from the food industry (25.1%). The services pro-vided by wholesale and retail trade (in total 11.2%) play a significant role in the dominant role of the wholesale. Transport is responsible for 5.8% of all flows directed to the food industry. The next in order of importance flows are the re-sult of goods and services offered by the following groups of branches: Metals, electrics – 3.7%; Services – 3.4%; Mining – 2.7%; Clothing, paper – 2.2%; En-ergy, water – 2%. Flows from the point of view of the share of the sectors of the economy in the entire material supply of the food sector are the subject of the analysis conducted later in the chapter.
Chart 4.8. Material supply of food industry branch structure on a global scale in 2014
Source: own elaboration based on WIOD.
The analysis of the diversification of the share of flows from agriculture to the food industry sector showed that in the static approach for 2000 and 2014 there is a clear relationship between this share and the level of GDP per capita for a given country. This is shown in Chart 4.9.
35,9%
25,1%
3,7%
8,2%
3,0%
5,8%
3,4%
Agriculture Mining Food industry Clothing, paper Energy resources Fertilizers, chemicals Metals, electrics Machines, cars Energy, water Architecture Trade and car repair Wholesale Detail Transport Hotels Finances Services Veterinary Rent Other
Chart 4.9. Relations between the share of flows from Agriculture to Food Industry in total material supply of Food Industry [in % – y axis] and the value of
GDP per capita [in thousand USD % – x axis] in 2000 and 2014
Source: own elaboration based on WIOD.
It is clear that in more developed economies, where the value of GDP per capita is a measure, the share of flows from agriculture to the food industry is generally lower. In the case of countries with lower GDP per capita, the share of flows from agriculture was on average around 45% in 2000 and around 40% in 2014. In order to investigate whether one could talk about a negative relation taking into account dynamic analysis, the panel model was estimated.
Table 4.7. Analysis results for relation between the share of flows from Agriculture to Food Industry in total material supply of Food Industry
and the value of GDP per capita
Specification Test F (p-value)
Test B-P (p-value)
Test H (p-value)
Value of the coefficient of the explanatory variable in the panel model Relation with:
GDP per capita 0,000 0,000 0,028 -0,001 ***
Source: own elaboration based on WIOD.
The most important results of the panel analysis are presented in Table 4.7. What is particularly important is the negative value of the explanatory factor ratio. This means that there is a negative relationship between economic growth and the decline in the share of agricultural flows in general flows to the food in-dustry sector.
As mentioned before, the second most important type of flows were those directed from the food industry itself. However, unlike in the case of agricultural flows, no clear relationship was found with any of the analyzed measures of economic growth.
For this reason, it should be recognized that economic growth is not a sig-nificant variable conditioning changes in the importance of this type of flows in the material supply structure of the food industry sector. And the size of these flows in a given country is influenced by other variables not analyzed in this
y=Ͳ0,0045x+0,4246
study. Similarly, it was not possible to detect dependencies in the case of the share of flows from the Metals, electrics group. Despite some promising results based on static analysis, in the case of the flow of services provided by whole-sale and retail trade, based on a panel analysis, it was not found that the change in the share of this type of flows may depend on the analyzed measures of eco-nomic growth.
Data analysis, on the other hand, allowed to capture dependencies relating to the share of flows from a group of branches collectively called Services.
Flows recorded from this group include legal, accounting, marketing or research services. It was noted that the share of such flows in the total supply of the food sector is higher for those countries characterized by a higher level of GDP per capita, which is graphically presented in Chart 4.10.
Chart 4.10. Relations between the share of flows Services ї Food Industry in total material supply of Food Industry [in % – y axis] and the value of GDP per
capita [in thousand USD % – x axis] in 2000 and 2014
Source: own elaboration based on WIOD.
Panel analysis, the most important results of which are presented in Table 4.8, confirmed the existence of a positive relationship between the level of GDP per capita and the share of services flows ĺ Food Industry. This means that with the economic growth one should expect an increase in the share of legal services, accounting, advertising and scientific research in the material supply of the Food Industry in general.
Table 4.8. Analysis results for relation between the share of flows Services ї Food Industry in total material
supply of Food Industry and the value of GDP per capita
Specification Test F (p-value)
Test B-P (p-value)
Test H (p-value)
Value of the coefficient of the explanatory variable in the panel model Relation with:
GDP per capita 0,000 0,000 0,001 0,001 ***
Source: own elaboration based on WIOD.
y=0,0011x+0,0181
The final type of flows, whose share changes in the overall supply of the Food Industry can be attributed to the economic growth are the flows of finan-cial and insurance services. The results of data analysis for 2000 and 2014 are presented graphically in Figure 4.11. It can be seen that the role of this type of services is growing in those countries that have a higher level of GDP per capita.
Chart 4.11. Relations between the share of flows Finances ї Food Industry in total material supply of Food Industry [in % – y axis] and the value of GDP per
capita [in thousand USD % – x axis] in 2000 and 2014
Source: own elaboration based on WIOD.
The positive relation between the share of financial and insurance services and the level of GDP per capita was also confirmed on the basis of the panel model (Table 4.9). The exceptionally low value of the coefficient is the result of the relatively small role of this type of flows in the material supply of the Food Industry, but the expected direction of dependence has been demonstrated.
Table 4.9. Analysis results for relation between the share of flows Finances ї Food Industry in total material
supply of Food Industry and the value of GDP per capita
Specification Test F (p-value)
Test B-P (p-value)
Test H (p-value)
Value of the coefficient of the explanatory variable in the panel model Relation with:
GDP per capita 0,000 0,000 0,000 0,0001 * Source: own elaboration based on WIOD.
Based on the calculations made, it can be concluded that economic growth is related to changes in the food industry’s outlook structure in three ways, which are summarized in Table 4.10. First of all, the share of valuable agricul-tural raw materials in general supply will decrease Food Industry. This is, more-over, in line with the long-observed decreasing share of raw materials costs in the price of food products (Schluter et al., 1998).
y=0,0011x+0,0181
Table 4.10. The relationship between economic growth and share of flows to the food industry from selected branches
Used indicator Share in the entire material supply Relation with economic growth GDP per capita Flows from agriculture Negative
GDP per capita Flows from the „Services” group Positive GDP per capita Flows from the „Finance” group Positive Source: own elaboration based on WIOD.
In addition, along with the economic development, the share of various types of services in the general supply of the Food Industry is growing. In the case of various types of services included in the “Services” group, there is an increase in the importance of, above all, legal and accounting services, as well as services related to advertising and market research. Like it took place in the case of the assessment of changes in the supply structure of agriculture, also in the case of the Food Industry, the share of financial and insurance services will grow.