Government support for agriculture at historical low

The Organisation for Economic Co-operation and Development (OECD) has welcomed new data which sugges…

The Organisation for Economic Co-operation and Development (OECD) has welcomed new data which suggests that global government support for agriculture fell to a record low last year.

The organisation’s latest Agricultural Policy: Monitoring and Evaluation 2012 revealed that government support fell to 19% of total farm receipts in 2011, with support to producers standing at just $252bn (€182bn). OECD said that this reflected a long-term worldwide trend towards falling levels of government support for agriculture, which has been driven by developments in international commodity markets.

Importantly, said the OECD, there has been a movement away from support linked directly to production, which distorts trade. However, it added that about half of government support was still having a distorting effect on global agricultural markets.

Variations in support

The report revealed big variations in levels of support between OECD countries. The lowest levels of support were found in New Zealand, where it accounted for just 1% of farm income in 2009-11. Australia, Chile, the US, Mexico, Israel and Canada also had levels of support below the OECD average of 20%.

The European Union stands exactly on the average at 20%, while Iceland, South Korea, Japan, Switzerland and Norway all have high levels of government support, with the latter reaching 60%.

“The move towards lower farm support is a welcome trend, but we still see the need for better targeting and more cost-effective farm policy,” said OECD trade and agriculture director Ken Ash.

“Farm support should be more closely directed at increasing agricultural productivity and competitiveness. Governments should also be doing more to address environmental issues, ensure sustainable resource use and help farmers better cope with risk.”