Countries should continue shifting farm policy away from direct support for the market price of agricultural products toward programmes that promote sustainable productivity growth and improve resilience to climate change and market-related shocks, according to a new report from the OECD.
Agricultural Policy Monitoring and Evaluation (link is external) finds that the 52 countries studied – representing all OECD and EU countries, and 11 key emerging economies – provided on average USD 519 billion (EUR 442 billion) annually to support agricultural producers during the 2014-16 period. Sixty percent of this support is provided by maintaining prices on domestic markets higher than those on international markets.
Government farm supports as a whole represented 16% of producer receipts in the countries studied, compared with 21% twenty years ago. The reductions in support levels reported in some OECD countries contrast with increased support levels in some emerging economies.
Support for general services to agriculture – including investments in people as well as innovation, knowledge and information systems, physical infrastructure, and in biosecurity services – was USD 90 billion (EUR 77 billion) in 2014-16. These services help create an enabling environment that allows agricultural and food production to be responsive, sustainable and resilient to external shocks, and are preferable to price support.
“Supporting market prices harms consumers, particularly the poorest, and reduces the food industry’s competitiveness,” said Ken Ash, Director of the OECD Trade and Agriculture Directorate. “Governments need to focus on agricultural policies, and particularly investments, that better align with their economy-wide goals.”
Full article available on the OECD website, via the link below.