|Source: OECD |
The share of farm receipts provided
by government programmes rose slightly in OECD countries to $252.5bn or 22% of
total farm receipts in 2009, reversing a declining trend in state support since
2004, according to a new OECD report.
Agricultural Policies in OECD Countries (highlights
of the publication) says the producer support estimate (PSE) rose to around
252.5 billion dollars or 22 percent of total farm receipts in 2009. This
compares with a 21 percent share in 2008 and 22 percent in 2007. The latest rise
in support across the OECD countries was due to the easing back of agricultural
commodity prices after they hit record highs in 2008. The falls triggered
government programmes aimed at propping up domestic prices or farm income.
The sharpest rises in support to farmers (in relation to total receipts) last
year occurred in Canada, where the PSE rose to 20% from 13% of farm receipts, in
Korea (52% from 46%) , Norway (66% from 60%) and Switzerland (63% from 57%). In
each of these countries the main cause was increased price support for dairy
In the US, support to farmers
rose to 10% of total farm receipts from 8% last year while in the EU the rise
was to 24% from 22%. In Australia, the ending of exceptional payments linked to
the restructuring of the dairy industry reduced the overall share of government
support to farmers.
The report argues that with public budgets under pressure in the wake of the
economic crisis, governments need to reassess and adapt their farm support
policies to meet specific economic, social and environmental objectives.
It says better targeting of support is needed to tackle particular issues such
as managing risks or protecting the environment. Policy makers should reduce
subsidies which distort markets and cut the link between government payments and
Compensating farmers for low prices or insulating consumers from price
fluctuations through export controls merely contributes to higher volatility in
world prices, the report says.
Ken Ash, the OECD’s Director of Trade and Agriculture, said: “More
focus should be placed on improving risk management while better functioning and
more transparent global markets could reduce price volatility.”
The Paris- -based OECD
think thank for governments has 31 mainly developed country members: Australia,
Austria, Belgium, Canada, Chile, the Czech Republic, Denmark, Finland, France,
Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Korea, Luxembourg,
Mexico, the Netherlands, New Zealand, Norway, Poland, Portugal, the Slovak
Republic, Spain, Sweden, Switzerland, Turkey, the United Kingdom and the United