IFs keeps track of both national (FPRI) and world (WAP) price indices for each of the three agricultural commodities. All of these are set to an index value of 100 in the building of the base.
The national crop price indices (FPRI, category (1) respond to: 1) changes in global costs of crop production, the latter being expressed as the ratio of global accumulated capital investment in crops to global production and 2) changes in the level of domestic crop stocks. The first factor should provide a long-term basis for rising or falling prices tied to changing technology and other factors of production; the second factor generally should represent shorter-term market variations from that long-term level.
The impact of global costs is given by dividing the ratio of global investment in crops to global production (wkagagpr) in the current year to that same ratio in the first year. The effect of stocks on crop prices (Mul) is calculated using the same ADJSTR function introduced in the description of crop supply, which considers the difference between both the current crop stocks and a desired vale and between current crop stocks and those in the previous year. Two parameters control the degree to which these two ‘differences’ affect the calculation of the adjustment factor. In this case, these are the global, user-controllable parameters fpricr1 and fpricr2 . All together the equation for domestic crop price indices in the coming year is given as
The domestic crop price indices are also bound between 0.01 and 1000.
The national meat price indices are linked the global crop price. Specifically, they are given as a moving average of the global crop price index.
fprihw is a global parameter used to control the speed at which the domestic meat price changes.
The national fish price indices are all set equal to the global fish price index. The determination of the global fish price is similar to that for the national crop price, but here the stock of interest is the global stock and there is no effect related to costs. The ADJSTR function is used once again to calculate the adjustment factor (MUL), this time focusing on the desired global fish stock, the difference between this and the current global fish stock, and the change in the global fish stock in the past year. Again, two parameters control the degree to which these two "differences" affect the calculation of the adjustment factor. In this case, these are the global, user-controllable parameters fprim1 and fprim2 [U1] . The global and national fish prices are thus calculated as
The world price indices for crops and meat are computed, in the following year, as a weighted average of the domestic prices, with the weights given by crop and meat production: