More than $500 billion is spent annually around the world on “often ineffective and trade-distorting support to farmers,” says the Organization for Economic Cooperation and Development. In an annual report, the OECD said, “little progress has been seen this decade in reforming agricultural support policies.”
Some $538 billion a year was spent by 53 nations studied in the report, half of it to artificially maintain domestic farm prices above the world price for the commodities. At the same time, farmers lost $83 billion due to policies that intentionally held down prices. The report looked at the industrialized West as well as emerging economies such as China, Brazil, Russia, India and Argentina.
“Governments can support farm households and rural communities without negative effects on global markets,” said Ken Ash, OECD director for trade and agriculture. They can do so, he said, by severing the link between government support and farm-level decisions on which crops to grow or by investing in public services, such as agricultural research.
“It is important to reinvigorate reform ambitions. Governments need to roll back distortive, inefficient and environmentally harmful support and put emphasis on high-return policy interventions and the enabling environment for a productive, sustainable and resilient agri-food sector,” said the OECD.
The OECD’s report, “Agricultural policy monitoring and evaluation 2019,” is available here.