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Support to farmers in the United States is relatively low in comparison with other OECD countries, at 9% of total farm income. Over the 2007-10 period, producer support in the US was the third lowest in the OECD area, and less than half the OECD average.
The reform process has been characterised by a shift towards forms of support that entail less distortion of production and trade. However, more scope remains for further reform towards the market orientation of the agricultural sector in the preparation of the next Farm Bill.
- Overall, levels of producer support and border protection have substantially decreased since 1986-88 and the level of producer support is now the third-lowest in the OECD area. However, since 2002 the decline has been primarily due to higher world commodity prices.
- The dairy and sugar sectors continue to receive high price support, which perpetuates market distortions in these sectors, although dairy price support has been lower in some recent years due to high market prices.
- Notwithstanding the increasing comprehensiveness of disaster assistance, the interactions of the new disaster assistance programmes introduced with the 2008 Farm Act with the crop insurance programmes; their ability to eliminate the need for ad hoc crop disaster payments; and, in general, the cost-effectiveness of the new whole-farm approach for crop disaster assistance, warrant careful attention.
- Although policy efforts to promote environmentally friendly agriculture have increased and monitoring and evaluation of agri-environmental programmes is now highly developed, coherence of conservation and farm policies is vital.
- Overall, enhancement of competitiveness and efficiency and changing priorities – such as climate change, food security – in tandem with budget problems as fiscal consolidation gets under way, may call for a re-think of the cost-effectiveness of commodity programmes, which are distributed unequally among sectors and farms.
United States: OECD Producer Support Estimates (PSE)
Level and composition by support categories, 1986-2010