Farmers' Purchasing Power Increased by 0.89% in August 2018

The Farmer Exchange Rate Index (NTP) in August 2018 increased by 0.89% to 102.56 from 101.66 the previous month. This is also the highest level since February 2018. This increase in NTP indicates an improvement in the purchasing power of farmers in rural areas. A higher NTP also signifies an increase in the terms of trade for agricultural products compared to goods and services consumed and used for farmers' production costs.

The increase in NTP in August 2018 was driven by a 0.75% increase in the Index of Prices Received by Farmers (It), while the Index of Prices Paid by Farmers (Ib) decreased by 0.14%. This means that the price index for agricultural production increased last month, while the price index for goods and services consumed by households and used for agricultural production decreased.

The improvement in the farmer exchange rate was influenced by the increase in NTP in the food crop subsector by 1.28%, the horticulture subsector by 0.94%, and the livestock subsector by 1.7% compared to the previous month. Meanwhile, the NTP for the peasant plantation subsector decreased by 0.56% from the previous month.