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Norway has seen modest progress in reducing the level and shifting the composition of support to agriculture. However the share of commodity-based support continues to be high and is dominated by market price support. At 60% of gross farm receipts, Norwegian agricultural support remains high.
Payments based on output have in recent years declined to about one-third of the level in 1986-88, but payments based on current production factors continue to account for an important share of the Producer Support Estimate (PSE).
- Overall, there has been modest policy reform since 1986-88 towards market orientation, and a modest reduction in the level of support. There has also been a move away from support based on commodity output, particularly with respect to payments based on output, but on the other hand payments based on current production factors have increased. While the share of most distorting support has declined significantly, it continues to account for more than half of overall support. Agriculture in Norway remains among the most highly protected in the OECD area and greater efforts are required to reduce the share of production-linked support and increase market access.
- Policy reforms such as the removal of the administered price for beef and increased flexibility in milk quota leasing are welcome steps to improve market orientation.
- Measures to improve environmental performance of agriculture, such as the new action plan to reduce risk related to the use of pesticides with a stronger focus on integrated plant management, provide important opportunities to further improve sustainability in production.
- Norway’s White Paper on Agriculture and Climate Change has identified the need to strengthen research on options for mitigation measures in agriculture. Future initiatives in Norway to promote knowledge development, including through international research cooperation, could provide important opportunities to develop a range of options for farmers to participate in climate change goals.
Norway: OECD Producer Support Estimates (PSE)
Level and composition by support categories, 1986-2010