The Organization for Economic Co-operation and Development (OECD) recently published its annual report on estimates of support to agriculture, titled the “Agricultural Policy Monitoring and Evaluation 2021.”
The report monitors and evaluates agricultural policies in 54 countries, including the 38 OECD countries, five non-OECD EU Member States, and 11 emerging economies.
Between 2018 to 2020, agricultural support policies across the 54 countries included in the report generated US$720 billion in support, averaged annually. Compared historically to 2000 to 2002, that number has doubled; but Martin von Lampe, senior agricultural analyst with OECD, points out that inflation has also increased, and sector size has grown over time. He recently joined RealAg Radio host Shaun Haney to talk about the report, and how Canada stacks up in terms of ag policy and support programs.
“The big chunk of those US$720 billion, in fact it’s US$540 billion per year goes to individual producers,” says von Lampe. “So the biggest share, almost three quarters of all positive transfers go to individual producers.”
The report also breaks down how that money is funnelled towards producers, and von Lampe says that there are two ways: market price support and budgetary support, both of which are equally distorting. Market price support essentially comes from policies that lift domestic prices, where the end money comes from consumers. Budgetary support is paid by taxpayers, not by way of consuming something but by way of paying taxes to the government, says von Lampe.
There are regional differences, in terms of the level of support, where farmers in non-OECD countries receive 11 per cent of all gross farm receipts. “It’s higher in the OECD countries, there it’s about 18 per cent, and it’s lower in the emerging economies,” says von Lampe. He adds that there are also differences in the structure of supports.
Canada is below the average, just under nine per cent of gross farm receipts in support coming from public policy.
“What’s interesting with Canada though, beyond that, is that essentially you have a dichotomy between a complete open type of policy where markets are really very much focused, international markets, and then you have those few markets that are under supply management, very much controlled,” says von Lampe.
Listen to the full interview between von Lampe and RealAg Radio host Shaun Haney, for more findings of the report and the “triple challenge” faced by global food systems: