Support to agriculture rising after hitting historic lows – OECD

Government support for agriculture in the world’s leading farming nations rose during 2012, bucking a long-term downward trend and reversing historic lows recorded in 2011, according to the latest version of an annual OECD report.

Public support to producers stood at an average one-sixth of gross farm receipts in the 47 countries covered in OECD Agricultural Policy: Monitoring and Evaluation 2013. The Producer Support Estimate has increased to 17% of gross farm receipts in 2012, compared to 15% in 2011, according to the new analysis.

The OECD sees a generalised move away from support directly linked to production, but finds that support that distorts production and trade still represents about half of the total. While OECD countries are increasingly de-linking support from production, emerging markets are relying more on border protection and market price support measures that tax consumers.

“With world markets for food and commodities buoyant and higher commodity prices expected to continue, the time is ripe for governments to credibly commit to wide-ranging farm support reform,” said OECD Trade and Agriculture Director Ken Ash.

“Meeting the needs of a growing and richer world population requires a shift away from the distorting and wasteful policies of the past towards measures that improve competitiveness, allowing farmers to respond to market signals while ensuring that much-needed innovation is fully funded,” Mr Ash said.

This year’s OECD report examines the state of agricultural policy in 47 countries that account for nearly 80% of global farm output, including seven emerging economies that are major players in food and agriculture markets: Brazil, China, Indonesia, Kazakhstan, Russia, South Africa and Ukraine. It shows that support levels vary widely, both across the OECD countries and across major emerging economies.

The European Union mirrored the OECD-wide trend, with farm support rising from 18% to 19% of farm receipts. The June 2013 agreement on EU’s Common Agricultural Policy for the 2014-20 period does not represent a major departure from either the current orientation or size of farm support in the 28 country bloc.

Some emerging economies which are key players in agriculture continued to increase support – in China farm support rose to 17%, in Indonesia it rose to 21%, and in Kazakhstan support reached 15%. Others maintained low levels of support, like Brazil (5%) and South Africa (3%).

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