With agricultural protection still high in many OECD countries, sensitive commodities such as sugar, milk and rice are often kept insulated from competition through prohibitive tariffs and export subsidies.
Domestic policies that aim to encourage production and increase income levels are often at the root of such protective trade policies, while domestic regulation in the area of food safety and quality, environment or animal welfare can significantly affect trade also.
Agriculture and Doha
On-going Doha Development Agenda (DDA) trade negotiations at the World Trade Organization (WTO) have yet to reach a conclusion, therefore some uncertainty still exists about further liberalisation in agriculture. Agriculture has again been one of the most difficult areas of the negotiations.
OECD provides economic analysis of issues that are related to the negotiations with a view to helping governments understand the nature of those issues and the potential impacts of different possible policy scenarios.
Governments are increasingly interested in forward-looking insights on possible developments in international trade in agriculture and food as well as the future role of large emerging economies in commodity markets on both the supply and the demand side.
The OECD and the United Nation’s Food and Agriculture Organization (FAO) collaborate on an annual publication that presents projections and related market analysis for some fifteen agricultural products over a ten year horizon.
The OECD-FAO Agricultural Outlook demonstrates how markets are influenced by economic developments and government policies and also highlights some of the risks and uncertainties that may influence market outcomes. In addition to OECD countries, the market projections in the report cover a large number of other countries and regions including India, China, Brazil and Russia as well as Argentina, South Africa and other developing countries.
Increased demand for crops as feedstock for biofuel production, increased demand from emerging economies, drought and other factors combined explain recent spikes in commodity and food prices. Some of these factors will persist in the longer term and will likely keep some commodity prices well above historical levels for some time.
Food prices will therefore continue to be a major issue for most countries and as such will receive considerable attention by the OECD. Particular attention is being paid to understanding the implications for food security and to developing the most appropriate policy responses.
See our latest work on:
Assessing agricultural markets
OECD-FAO Agricultural Outlook
Standards for seeds, tractors, forest, fruit and vegetables