Agricultural Policy Measurement: An Overview of Existing Approaches

Transcription

1 Agricultural Policy Measurement: An Overview of Existing Approaches Jonathan Brooks, Trade and Agriculture Directorate OECD Global Forum on Agriculture, Shared Approaches to Measuring the Agricultural Policy Environment, 16th December 2013, Paris

2 Issues to be addressed today 1. Who is engaged in agricultural policy measurement? 2. Why are IOs interested in collaboration? 3. What would be the gains? 4. How big are the challenges on substance? OECD Trade and Agriculture Directorate 2

3 Who is engaged in agricultural policy measurement? OECD Monitoring and Evaluation for OECD members plus 7 emerging economies FAO Monitoring African Food and Agricultural Policies (10 African countries) IFPRI so far mostly public expenditure analysis, border measures Regional development banks [IDB (18 Latin American countries), AfDB] Asian Productivity Organisation (APO, 5 Asian countries) World Bank Distortions to Agricultural Incentives (82 countries) plus public expenditure reviews Plus ad hoc efforts OECD Trade and Agriculture Directorate 3

4 Why measure agricultural policies? Need to know what policies are in place before you can evaluate their impact Need to classify those policies and quantify them We are interested in policies that can support a range of agriculture-related objectives Incomes, poverty, food security, welfare Market failures, public goods, externalities Indicators can help in the evaluation of policies Directly (M&E), indirectly (input into models, data for econometric estimates) OECD Trade and Agriculture Directorate 4

5 What needs to be measured? Price policies: whether farmers are taxed or supported (subsidised), also interventions upstream and downstream Effects on producers, consumers and participants along the value chain Budgetary expenditures In support of agriculture and rural development Ideally want a system that can distinguish between policies with different impacts Policies that distort prices versus those that correct externalities Spending on public goods versus private goods OECD Trade and Agriculture Directorate 5

6 Some existing approaches OECD s PSE methodology integrates measurement of price support with budgetary transfers Overall picture of transfers to farmers (PSE) and the agricultural sector (TSE) FAO s MAFAP computes price incentives & disincentives as well as (separately) budgetary expenditures Exhaustive system of public accounts World Bank s DAI project focuses on price distortions Wide country coverage Each approach has a rationale reflecting basic aims of the exercise OECD Trade and Agriculture Directorate 6

7 A global view is increasingly important Increasing importance of developing countries to economic growth and to trade Increased integration of developing country markets with world markets The locus of more severe concerns, not least food security Key actors in terms of policies that support domestic prices and those that suppress them (e.g. export taxes) OECD Trade and Agriculture Directorate 7

8 The changing policy context Two key drivers of agricultural policy developments: Income growth emerging economies catching up with developed economies, some developing countries being left behind Changes in market fundamentals shift from demand constrained agriculture to supply constrained agriculture OECD Trade and Agriculture Directorate 8

9 Support in the OECD area has declined and become less trade distorting Producer Support Estimate, Percentage of gross farm receipts Share of farm receipts stemming from support: : 37%; : 30%; : 19% Share of potentially most distorting support: : 89%; : 77%; : 58%

10 Several emerging economies now supporting agriculture at rates similar to the OECD average Producer Support Estimate, Percentage of gross farm receipts

11 Support reflects a combination of comparative advantage and income level %PSE Percentage of gross farm receipts

12 But a given rate of support imposes a higher burden on lower income countries Total Support Estimate,

13 How extensive is OECD coverage? % share of agricultural production covered by OECD PSE estimates (OECD countries + 7 emerging economies) Total is about 2/3 of the value of global agricultural production

14 Nominal rates of assistance for HICs and MICs tell a similar story to OECD NRAs, Percentage of gross farm receipts Support in LICs low or negative Source: Anderson and Nelgen

15 OECD estimates capture the trend in MICs NRAs, Percentage of gross farm receipts Source: Anderson and Nelgen

16 Political economy of agricultural policies Several OECD countries have reformed policies but they have not dismantled them in favour of targeted alternatives Emerging economies are increasingly able to afford transfers from consumers and taxpayers to farmers (OECD and DAI) Low income countries provide fewer distortions, but farmers are taxed by higher transaction costs (MAFAP) Should be a propitious moment to shift from farm support to more efficient alternatives for countries at all levels of development OECD Trade and Agriculture Directorate 16

17 Differences in methods across measurement efforts, but Easy to establish a correspondence between the OECD s NPC and the NRA the simplest measure of price distortions More difficult challenges in bringing together information on agricultural expenditures The key is a commitment to sustain measurement into the future a clear objective of OECD s monitoring and MAFAP Huge scope for these indicators to inform national policy as well as dialogue at regional and multilateral levels Important gains from pooling policy information in a common resource where this is possible OECD Trade and Agriculture Directorate 17

18 For more information Visit our website: Contact us: Trade and Agriculture Directorate 18