Governments increasing agricultural support, says OECD study

There is increasing government agricultural support in major farming nations. Government support rose in 2012 following a downward trend and historic lows in 2011.

The finding comes from data gathered by the OECD (Organization for Economic Co-operation and Development).

Over 47 countries were examined in the “OECD Agricultural Policy: Monitoring and Evaluation 2013” report.

The report revealed that Producer Support increased to 17% of gross farm receipts in 2012, compared to only 15% in 2011.

There is a general shift away from support directly linked to production. However, nearly half of all support is that which distorts production and trade.

Emerging markets are beginning to rely more on market price support measures that tax consumers.

OECD Trade and Agriculture Director, Ken As,h said that higher commodity prices are expected to continue and it is the time for governments to commit to a farm support reform.

There is a need to meet the needs of a growing and richer population, and this requires a move away from “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.”

Agricultural support varies by country

The report looked at countries which account for 80% of the world’s farm output, including:

  • China
  • Brazil
  • Indonesia
  • Russia
  • Kazakhstan
  • South Africa
  • Ukraine

Support varied widely among countries in the OECD as well as those in major emerging markets.

A total of $258.6 billion (EUR 201.2 billion) was spent in OECD area support, representing 19% of farm receipts – 1% higher than in 2011.

Countries that offered farmers the highest levels of support increases were:

  • Japan – 53%
  • Norway – 63%
  • Switzerland – 57%
  • Korea – 54%

Countries that offered low levels of support were:

  • Mexico – 12%
  • Israel – 11%
  • United States – 7%
  • Australia – 3%
  • Chile – 3%
  • New Zealand – 1%

European Union farm support rose from 18% of farm receipts in 2011 to 19% in 2012.

The biggest increase in farm support occured in economies that have shifted their policies to self-sufficiency. There are no strong links between high self-sufficiency and improved food security, according to the OECD.

The report said that reducing poverty and developing safety nets is a more efficient means of improving access to food.

The authors conclude that investments for the farming sector should receive more attention. Farm productivity that relies on innovation policy and investing in research and development (such as technology, education, and advisory services) will greatly help the industry.

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