Efficient agricultural policies are essential to meeting increasing demand for safe and nutritious food in a sustainable way. While growth in demand for food, feed, fuel and fibres presents significant opportunities for agriculture, government policies must address challenges such as increasing productivity growth, enhancing environmental performance and adaptation to climate change, and improving resilience of farm households to market shocks brought on by weather and other unforeseen circumstances.
Policy monitoring and evaluation provides needed evidence for governments to ensure that their agri-food policies address these challenges well. Efficient policies clearly separate targeted measures that provide income support to farm households in need, from measures that support increased farm productivity, sustainability, resilience and overall profitability.
Countries have substantially altered their agricultural trade and domestic support policies over the past two decades. In some countries, support provided to farmers has become more decoupled from production – meaning that many farmers no longer receive payments for producing a specific commodity – and instead has begun to target environmental outcomes. But in some developed countries, support remains high and linked to production, while some emerging economies have also significantly increased policy interventions that distort production decisions. In both cases, support could have been better targeted atpublic services that benefit producers, consumers and society overall.
The OECD publishes an annual Agricultural Policy Monitoring and Evaluation report, which reviews developments in agricultural policies and provides up-to-date estimates of government support to agriculture for all OECD and the European Union as a whole, plus key emerging economies. The 2019 edition includes Argentina, Brazil, People’s Republic of China, Costa Rica, India, Kazakhstan, the Philippines, the Russian Federation, South Africa, Ukraine, and Viet Nam. Colombia, which became the 37th member of the OECD in April 2020, is included as an 13th emerging economy in the data aggregates presented in this report. The report puts special emphasis on reviewing initial policy responses to the COVID-19 pandemic relevant to the agro-food sector, and highlights both developments in the productivity and sustainability performance of agricultural production and policy changes affecting this performance.
Prior to being included in the annual report, countries undergo an in-depth country review which discusses in detail strengths and weaknesses of both the country’s agricultural sector and its agricultural institutions and policy environment. The subsequent partnership for the annual report builds on these studies to follow agricultural policy developments. Countries also provide important peer review of both policy data and analyses in the report.
Data underpinning the report come from the OECD producer and consumer support estimates (PSE and CSE) database. The OECD uses a standardised methodology to create this set of agricultural support indicators that allow for comparison of agricultural support between countries, and over time. This methodology is continuously updated and refined to maintain and improve its relevance in a changing policy environment.
The OECD is also a founding member and key partner in the International Organisations Consortium for Measuring the Policy Environment for Agriculture, which is working to develop a harmonised and consolidated database of well-documented agricultural support indicators for an even larger set of countries.
Agricultural policy packages need to be both coherent and efficient to enable the sector to develop its full potential and achieve key public policy objectives. The sector is facing a number of challenges related to meeting future demands for food, fuel, fibre and eco-services in a more sustainable manner in the context of a changing climate.
The latest Agricultural Policy Monitoring and Evaluation report shows that the 54 countries studied provided USD 708 billion (EUR 620 billion) annually to support their agricultural sectors during the 2017-19 period, while at the same time six of the countries implicitly taxed their producers to the tune of USD 89 billion (EUR 78 billion) per year by keeping prices below world levels. Two-fifths of the support to the sector is provided through policies that artificially maintain domestic farm prices above international levels, while another 9% are payments linked to output or the unconstrained use of variable inputs. All these policies are distorting production decisions and markets particularly strongly. What is more, these policies obstruct efforts to make agriculture more productive, sustainable and resilient, and only a small 15% of all support went to general services such as research and development or infrastructure, which are needed to equip the agricultural sector for future challenges.
OECD research and analysis on this subject over past 30 years gives rise to the following key policy recommendations:
Read the full 2020 report on the OECD iLibrary, or access previous editions and country studies.
This annual report monitors and evaluates agricultural policies spanning all six continents, including OECD members, the European Union, and key emerging economies. It is a unique source of up-to date estimates of support to agriculture using a comprehensive system of measuring and classifying support to agriculture.
The compare your country tool allows you to access individual country profiles that provide an overview of support to agriculture.
The full suite of agricultural support data are updated each year, and can be accessed on OECD.Stat.
To increase the transparency and accessibility of the OECD indicators of support to agriculture, a considerable portion of the PSE/CSE database is now incorporated into a single Excel spreadsheet, the PSE Browser. The spreadsheet uses the PivotTable function, which allows the user to filter the data to obtain information by country, category, labels, commodity and policy measure.
Access individual policy measures and selected relative indicators data for each country (xls) with definitions and sources for each (pdf).
Agricultural policies aim to address a wide range of issues, from assisting farmers to achieve adequate incomes to providing sufficient food at reasonable prices for consumers, and from improving the sector’s resilience to weather, market or other shocks to ensuring food safety and improving the environmental performance. To help governments better understand how much and in what form support is provided, the OECD created a set of indicators that express policy measures with numbers in a comparable way across time and between countries.
While the main agricultural support indicators used in our analysis are defined below, you can find a complete guide to all definitions and methodology in our online PSE Manual.
The Producer Support Estimate (PSE) indicator estimates the annual monetary value of gross transfers from consumers and taxpayers to agricultural producers, measured at the farm-gate level, arising from policy measures that support agriculture, regardless of their nature, objectives or impacts on farm production or income.
Complementing this indicator, the Consumer Support Estimate (CSE) reflects the annual monetary value of gross transfers to consumers of agricultural commodities, measured at the farm gate level, arising from policy measures that support agriculture, regardless of their nature, objectives or impacts on consumption of farm products.
On the other hand, the General Services Support Estimate (GSSE) is used to estimate the annual monetary value of gross transfers arising from policy measures that create enabling conditions for the primary agricultural sector through development of private or public services, and through institutions and infrastructures regardless of their objectives and impacts on farm production and income, or consumption of farm products. It includes policies where primary agriculture is the main beneficiary, but does not include any payments to individual producers. GSSE transfers do not directly alter producer receipts, costs or consumption expenditures.
Taken together, the Total Support Estimate (TSE) provides an overall estimate of the annual monetary value of all gross transfers from taxpayers and consumers arising from policy measures that support agriculture, net of associated budgetary receipts, regardless of their objectives and impacts on farm production and income, or consumption of farm products.
Access all editions of the Agricultural Policy Monitoring and Evaluation series on the OECD iLibrary.
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