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The implications of trade-distorting and decoupled farm support in OECD for developing countries. Ekaterina Krivonos Trade and Markets Division Food and Agriculture Organization of the United Nations. Measuring support to agriculture.
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Ekaterina KrivonosTrade and Markets DivisionFood and Agriculture Organization of the United Nations
PSE: Annual monetary value of gross transfers from consumers and taxpayers to support agricultural producers, measured at farm gate level, arising from policy measures
In the OECD PSE estimates, Market Price Support (MPS) and payments based on output and input use are most distortive.
The decline in PSE does not necessarily reflects policy changes, but could be the result of higher world prices that reduce subsidy due to smaller gap between minimum prices and world market prices
OECD total (2010)
**Based on long-term resource retirement Based on a specific non-commodity output Based on other non-commodity criteria
The 2011 Commission’s proposal
Source: Giovanni Anania (2012)
Producer support estimate (PSE) in Norway million NOK
While the share of potentially most distorting support policies in the PSE has decreased (from 78% in 1986-88 to 52% in 2009-11), it nevertheless continues to account for more than half of total support.
% PSE* in Norway and OECD total
* PSE to the value of total gross farm receipts, measured by the value of total farm production (at farm gate prices), plus budgetary support.
Distribution of Norway’s market price support by commodity, 2010
Source: Huff, Krivonos, and van der Mensbrugghe (2006)
Source: Skully (2009) based on Anderson, Martin and Valenzuela (2006)
Source: Trade Policy Technical Note No. 13 (FAO)
Source: FAO Trade Technical Note No. 5. “Domestic support: trade related issues and the empirical
Agricultural subsidies in developing countries (even “coupled” such as input subsidies) are important tools for stimulating production and investments in agriculture since many countries with serious supply concerns have not yet realized the full potential of agricultural development