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Evolution of Agricultural Support in Real Terms in OECD Countries and Emerging Economies

By Jean-Pierre Butault

Abstract

This report proposes a methodology to express OECD indicators of support in real terms and establishes specific purchasing power parities for a broad range of commodities so as to compare developments in output volume and prices at an aggregate level. It analyses the evolution of prices, farm receipts and support to agricultural producers in real terms in OECD countries and a number of emerging economies. In the OECD area, support to producers decreased between 1986 and 2009, but two periods can be distinguished. Prior to 1999, the producer support estimate (PSE) in real terms decreased by 20%, but as a percentage of farm receipts (%PSE), the reduction was only 2 percentage points as farm receipts also decreased in a context of falling world prices. Between 1999 and 2009, in a context of rising world prices and farm receipts the decline in both the %PSE and the PSE in real terms was more marked, and the gap between domestic prices and border prices was significantly reduced. This analysis has also been applied to seven additional countries for the period 1995-2007, including two that have since become OECD members (Chile and Israël). Output growth was very strong in these countries with the exception of Russia and Ukraine, leading to higher farm receipts in terms of purchasing power. Support to producers declined in Israël, Chile and South Africa, and increased in other countries, albeit moderately. As a percentage of farm receipts, it remains well below the OECD average.agricultural support, PSE, purchasing power parity, Single commodity transferts, GDP deflator, OECD support indicators

DOI identifier: 10.1787/5kgkdgf25x20-en
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