This chapter contains a review of the main policy developments that have taken place over the course of 2023 and early 2024. It also reports on the latest data on agricultural policy support by country, including the level and composition of support and its changes over time.
Agricultural Policy Monitoring and Evaluation 2024
Innovation for Sustainable Productivity Growth
Agricultural Policy Monitoring and Evaluation
Abstract
Policies in agriculture evolve in response to dynamic conditions and priorities, including events that affect farmers’ abilities to produce and earn a livelihood. Public expectations of the sector and its role in society evolve over time, as do the preferences of consumers with respect to the quality and provenance of the food they eat. The need to achieve sustainable productivity growth (SPG) has become an important driver of policies, and the connection between trade openness and food security is by turn reinforced and doubted as multiple crises test the global trading system. This section reviews the main policy developments that have taken place over the course of 2023 and early 2024 in response to conditions both short and long term.
Policy frameworks
The year 2023 was the first full year of implementation of the new Common Agricultural Policy (CAP) of the European Union. This new CAP introduces Strategic Plans for each country and aligns the CAP more closely with broader initiatives such as the Green Deal. Many EU countries fine-tuned their strategic plans in 2023 and 2024 by adopting several amendments following the approval by the European Commission. EU Member States started to implement the full range of new types of direct payments, including eco-schemes, which are a new policy tool aimed at encouraging more sustainable farming models.
This was also the first year of the “Sustainable Canadian Agricultural Policy Framework” (Sustainable CAP). This new framework aims to better integrate environmental and climate risks while maintaining its core focus on managing market and production risks. Incentives are provided for crop diversification, adoption of beneficial practices, and the need for larger farms to have environmental risk assessments.
In the People’s Republic of China (hereafter “China”), the “No. 1 Document” was released in February 2024 with a specific focus on “green agriculture”. Among the priorities identified were protecting and restoring rural ecosystems, more rational use of chemical fertilisers, pesticides and antibiotics, remediation of heavy metal pollution, and the prevention and control of major animal-borne diseases.
National budgets made special provisions for agriculture in many cases. For example, the Italian budget provides support for youth and female entrepreneurship in agriculture and extends a special income tax exemption for landowners and farmers. The French Finance Bill for 2024 increases funding for the Agriculture and Food Sovereignty Ministry by 27%, with priorities to support farmers, ecological planning, manage sanitary risks, and train innovative young farmers.
Compensatory programmes addressing increased costs or market disruption
Canada launched two programmes to compensate for the effects of trade agreements on supply managed sectors (dairy, eggs, poultry). The Dairy Innovation and Investment Fund provides financial support to Canadian dairy processors to improve solids non-fat processing capacity. The Supply Management Processing Investment Funds received additional funding in response to the Canada-US-Mexico Agreement (CUSMA) to support investments for processing facilities that improve productivity or efficiency through the purchase of new automated equipment and technology.
In early 2024, Indonesia changed the system of fertiliser subsidies in response to current high level of international prices that made the allocated budget insufficient. The budget will be increased by 56% and the price gap subsidy will be transformed into a direct payment to buy fertilisers.
Several compensation measures were implemented in Croatia to respond to market disruptions, increased costs, natural disasters, and African Swine Fever. To compensate agriculture and forestry for increased input costs and declining competitiveness, Sweden further augmented the tax reduction applied to diesel used in professional agriculture, forestry and aquaculture activities, effectively eliminating diesel taxes for certain farmers. Additional support measures using EU funds have been implemented in the Slovak Republic, Bulgaria, Hungary, Poland and Romania to compensate producers impacted by low-priced grain imports from Ukraine. Exceptional aid was directed to fruit, vegetables, hops growers and dairy farmers affected by high energy, feed and fertiliser prices in Czechia. Poland introduced state aid programmes, including subsidies for mineral fertilisers, in response to the severe economic disturbances on the agricultural market, including those caused by Russia’s war of aggression in Ukraine.
In May 2023, the EC approved an exceptional support package within the scope of the “Pact for the Stabilization and Reduction of Food Prices” in Portugal. This support compensates for the increase in cost of production factors, along with new support for diesel energy costs. Portugal also offered support to mitigate effects of droughts for the cattle, sheep, pigs, beekeeping and winter cereals sectors. Similarly, Spain granted support to respond to crisis situations to drought and the worsening of conditions in the primary sector resulting from the war in Ukraine. Direct aid was provided to livestock and other agricultural sectors and beekeepers from the national budget and the budget for agricultural insurance subsidies was increased. Existing financial measures including credit and guarantee support were also expanded.
After a series of severe weather events, including Cyclone Hale, the Auckland Anniversary weekend floods (both in January 2023), and Cyclone Gabrielle (February 2023), New Zealand provided support for cleanup and recovery. This included farmers’ and growers’ grants, a mobilisation fund for urgent response and support projects, and the North Island Weather Event Regional Recovery Funding.
The 1st Agricultural Disaster Insurance Development Basic Plan (23-27) was announced in Korea. The plan aims to increase participation, scope and coverage for farmers and to build a tight safety net by operating in complement to other agricultural disaster recovery measures.
Temporary financial support measures were provided to agricultural producers in Lithuania in 2023 due to impacts of the COVID-19 pandemic, the war in Ukraine, and sector-specific challenges. Loan guarantees were provided for investments and working capital to mitigate negative economic impacts of the war in Ukraine. Financial support was also provided to some agricultural producers for crop damages from spring frosts for the horticulture sector and damages from summer hailstorms.
Emergency assistance programmes were provided in the United States in 2023 in response to natural disasters, disaster-driven cost increases, and market disruptions. This includes retroactive payments for consequences of COVID-19 and crop and forage losses experienced in 2022.
Improving environmental sustainability
In the European Union, the new CAP introduced the so-called enhanced conditionality which integrates elements of cross-compliance and greening from the previous CAP. However, a review of the CAP Regulations in early 2024 includes additional flexibility and exemptions to Member States in adopting conditionality standards. Among the approved changes, there is the full exemption of small farms from compliance controls. These changes of the CAP were accompanied by the delay or withdrawal of several legislative proposals related to the Farm to Fork and Biodiversity Strategies, including the new Regulation on the Sustainable Use of Plant Protection Products.
To better align with environmental carrying capacity, Flanders (Belgium) is providing payments to pig farmers to reduce or entirely close their operations. The policy was approved by the European Commission in March 2023 and will be in place until June 2025.
Within the framework of the CAP in the European Union, the new performance, monitoring and evaluation framework (PMEF) with corresponding evaluation elements and evaluation topics has been introduced. This includes a new indicator system (output, impact, result, and context indicators) with corresponding evaluation elements and evaluation topics. As an example, Austria is implementing “Environmentally friendly and biodiversity-promoting management” and “Organic farming” measures. These measures will create new biodiversity areas in which requirements for crop diversification must be met and further training in the field of biodiversity must be completed. It also calls for the preservation of operational grasslands.
In response to press reports on high rates of contamination of vegetables by pathogens and pesticide residues, Viet Nam issued a decision to develop “safe, concentrated vegetable production areas.” Within these zones, the government undertakes testing of soil and water quality, monitors pathogens and pesticide residues, and prohibits livestock farming to prevent contamination.
Portugal encouraged more efficient water management in agriculture by allowing the conversion of permanent crops outside areas benefiting from hydro-agricultural development, with the condition that the new crop is less demanding of water and has an efficient, proven irrigation system installed.
To reduce dependence on imported raw materials for chemical fertiliser, Japan introduced measures to expand the use of domestic resources for organic fertilisers. The main measure was support payments to livestock farmers and compost manufacturers to partially cover the cost of building facilities for the manufacture of compost.
The “Hedgerow pact” that is part of the ecological plan France Nation Verte includes 25 actions to create 50 000 km of new hedgerows by 2030. The plan includes a method for local authorities to develop locally adapted and valuable hedgerows, an observatory to monitor the project, and regulations to secure rules around hedgerows.
Through the Nature Repair Market Act, a range of landholders (including the agricultural sector) in Australia may partner with parties wishing to support long-term improvements in biodiversity. Projects could include the formal protection and conservation of sites of high environmental value, and restoration of areas that may have been degraded because of past activities. This makes it easier for business, philanthropists, and others to invest in repairing nature.
Climate Action Plans were published for 2023 and 2024 in Ireland setting out the policy framework and actions toward climate mitigation and adaptation, including for Agriculture and LULUCF. Agriculture must achieve a 25% reduction in emissions, compared to the 2018 baseline, by 2030 under carbon budget ceilings.
The “Biodiversity Strategy of the Ministry of Agriculture, Forestry and Fisheries” of Japan was revised in March 2023 in response to the Kunming-Montreal Global Biodiversity Framework. The new strategy sets out the vision for 2030 and directions for tackling biodiversity-related issues such as reducing the burden of agriculture, forestry and fisheries on the global environment and facilitating collaboration for biodiversity conservation within the whole food supply chain.
In November 2023, Romania’s long-term strategy for reducing GHG emissions, which aims to make Romania carbon neutral by 2050, was approved. The strategy includes agriculture, waste and land use, land-use change and forestry (LULUCF), and assesses in detail the prospects, options, costs and benefits of the measures to be implemented to ensure sustainable development in the medium and long term, while significantly reducing GHG emissions and improving GHG absorption at the sectoral level.
Actions to reinforce social sustainability
Various adjustments were made to fine-tune labour policies to labour needs in Canada. The proportion of the workforce employed through the Temporary Foreign Worker (TFW) Program will be decreased and agri-food occupations are one of six categories prioritised for economic immigration. The Agri-Food Pilot programme that addresses long-term labour shortages in the agricultural sector was extended, with expanded eligibility criteria and pathways to permanent residency.
The Act on Revitalisation of Economic and Social Services in Rural Areas Based on Rural Community was enacted in Korea to address the issue of service shortages in rural areas and support the revitalisation and sustainable development of rural communities. Under this law, administrative and financial support are provided for communities voluntarily established by rural residents to offer services within rural areas. The establishment and expansion of these communities are also supported through education, training, and counselling.
Viet Nam has taken steps to encourage the development of agricultural co-operatives to support sustainable development. A goal was set to have at least 300 operating agricultural co-operatives by 2030.
Land consolidation and restructuring of land markets is expected to bring benefits in several countries. Progress was made on land reform in Ukraine with the opening of land markets to legal entities, such as companies, banks and territorial communities. These can now purchase up to 10 000 ha of land, the latest step in the progressive opening of land markets under a 2020 law. The Land Consolidation Project in the Slovak Republic aims to accelerate the settlement of property rights, helping land markets to function, improving the efficiency of agricultural policy implementation, and lowering investment costs associated with environmental measures at the farm level. Consolidation of agricultural land to reduce the number of land plots per owner or user while increasing the area of individual plots is on the agenda in Croatia as a part of the National Recovery and Resilience Plan 2021-2026. The planned improvement in the structure of farmland is expected to increase the quality of life in rural areas, increase agricultural productivity, and encourage investment in agricultural infrastructure.
In the European Union, the new CAP 2023-27 obliges EU countries to dedicate at least 10% of their financial allocation for direct payments to the Complementary Redistributive Income Support for Sustainability (CRISS), an extra payment for the first hectares. The aim is to promote more balanced distribution of income support to small- and medium-sized farms. The new CAP also introduced the concept of social conditionality (i.e. rules related to labour under which farmer payments are linked to compliance with certain labour laws).
Funding and advisory services were made available to Māori agribusinesses in New Zealand to help them realise the potential value of their land and primary sector assets, to develop and implement local solutions to improve freshwater quality, and to identify needs and encourage equitable access to government cyclone recovery funding and support. Both the New Zealand-United Kingdom FTA and the New Zealand-European Union FTA include Māori trade and co-operation chapters to increase trade opportunities for Māori primary producers, and to allow for differentiated arrangements for Māori businesses without breaching the free trade agreements.
The New Agrarian Emancipation Act in the Philippines writes off credit debt for more than half a million farmers. The act writes off loans, including principal, interests, and penalties incurred by farmers who have outstanding loan balances to the Land Bank of the Philippines and to private landowners. Under previous laws, these debtors were required to pay for land in the form of an annual amortisation for a maximum period of 30 years. In addition, the government approved a compensation to landowners under the Voluntary Land Transfer and the Direct Payment Scheme.
Improving the Agriculture Knowledge and Innovation System (AKIS)
National knowledge hubs for animal production, business management and entrepreneurship, and digitalisation were established in Sweden under a national fund to bridge the knowledge gap between research and practice by compiling and disseminating knowledge, strengthening collaboration between AKIS actors, and improving integration of advisors within AKIS. A similar knowledge hub was already in place for climate and environment.
Lithuania is developing an on-line tool to estimate farm-level CO2 emissions and absorption, which is intended to be used for emission certification and trading. An on-line regulatory system for fertiliser accounting at the farm-level is also being developed and will be used for sustainability criteria reporting.
The measure Investment Support for Valorisation of Bioresources was initiated in Estonia. It is part of Estonia’s push to emphasise circular bioeconomy and to become a leader and recognised local development centre on this topic. To this same end, the National Circular Bioeconomy Roadmap was adopted.
The National Institute of Innovation and Transfer in Agricultural Technology (INTA) of Costa Rica introduced a new variety of red bean named Urán, developed in collaboration with the University of Costa Rica. The Urán variety is more resistant to drought and high temperatures, shows higher average yields than another widely cultivated bean variety, and is resistant to a common disease affecting the crop.
The AgNav digital platform is a support tool in Ireland developed in 2023 and deployed in 2024 which enables the estimation of farm-level emissions, enabling farmers and their advisors to create and model the environmental impact of a farm sustainability plan. AgNav provides a mechanism to support the quantification of progress towards Climate Action Plan targets for the agriculture sector.
Reinforcing biosecurity, animal health and animal welfare
Australia increased biosecurity funding with an additional investment over four years and a permanent increase from 2027. To respond to community expectation in relation to sheep welfare, an independent panel was established to advise on phasing out live sheep export by sea from Australia. The panel provided advice to government to develop an orderly phase-out plan which considers the needs of affected individuals, businesses and local communities, and identifies opportunities for future growth in the Australian sheep industry.
Transformation of livestock systems in Germany is promoted through several actions: support is provided for more animal-friendly farming systems, e.g. investments in the design and equipment of stables or of individual keeping areas and related to the costs going beyond mandatory animal welfare standards. In addition, a new mandatory state label provides information on different husbandry systems. The minimum age for calves to be transported within Germany has been raised to 28 days.
Support to organic production
Italy approved the National Action Plan for Organic Farming to promote the development of the organic sector over the 2024-26 period and to reach the target of 25% of the UAA under organic farming by 2027. The plan aims to enhance national organic production by promoting consumption, organic districts, organic canteens, research, and innovation. In addition, it promotes the knowledge of organic production through targeted campaigns and training activities dedicated to sector operators.
The BIO 2023 fund in France increases funding for Agence BIO. Additional support was announced to support organic farms facing difficult economic situations to avoid these farms reconverting to conventional production. Local authorities are also engaged to help ensure that targets will be met and to reinforce the organic food agency. Germany increased support for organic agriculture, including support for research projects targeting enhanced biodiversity and for advisory services for away-from-home catering companies. To encourage consumption of organic products and make consumers aware of the benefits of organic production Spain launched a campaign called Aquí somos Eco-Lógicos (here we are Eco-Logic). Spain has increased by 40% its support to organic production over the amount in the previous CAP, which now receives the largest funding allocation under AECMs (Agri-Environment-Climate Measures) in their CAP strategic plan. Ireland increased the grant rate to 60% under the Organic Processing Investment Grant Scheme. The scheme provides funding to processors who wish to invest in developing facilities for the processing, preparation, grading, packing and storage of organic products. Austria’s Sixth Organic Action Programme is the central instrument for achieving a 30% organic land share by 2027, with a possible further expansion towards 35% by 2030 as stipulated in the Organic Action Programme 23+. In Latvia, support was redirected within the existing envelope to address the challenges created by changes in the market. This in line with the National Organic Action programme adopted for the period 2023-2030 setting the overall target to reach 25% organic land share.
The Organic Products and Production Act became law in New Zealand. The Act aims to help with developing new standards for organic products and sets requirements for businesses in the organic sector from production through to sale.
The first national action plan in Malta for organic food covers the years 2023 to 2030. The plan addresses the needs of the agricultural sector to move towards organic production and achieve Malta’s target of having 5% of its utilisable agricultural area under organic certification by 2030. The action plan creates a more favourable ecosystem for the producer, strengthens institutions, and creates robust and short supply chains and markets in the organic sector.
Measures for the food system
Domestic production and food security
Kazakhstan implemented trade measures to stabilise domestic markets of certain commodities. This included an export duty on sunflower seeds to curb price increases in the country and an import ban on wheat to support domestic farmers and to stabilise the price of locally-produced wheat, which is facing competition from cheaper Russian grain. Kazakhstan also used preferential financing to establish dairy farms through regional agricultural co-operatives.
The new “Farm Opportunities Programme” in Germany supports the domestic production of protein crops and helps farmers to switch away from animal husbandry to production and processing of innovative protein food and other climate-friendly food.
India increased the minimum support price from the previous marketing season for several summer planted (kharif) crops, including rice, maize, groundnut, soybean, pigeon pea, black gram, and cotton. In October 2023, the minimum support prices for winter planted (rabi) crops was also increased, including for wheat, barley, gram, lentil, and rapeseed. In June 2023, the Fair and Remunerative Price for sugarcane was increased by 3.3%.
A review of the CAP Regulations – the so-called “simplification package” in the European Union, will rationalise conditionality requirements to avoid overlapping of existing standards. The approved changes, which will be in force until the end of the current CAP 2023-27, aim to reduce the burden on farmers and provide more flexibility for Member States regarding some conditionality standards. This change affects good agricultural and environmental condition (GAEC) standards 1, 5, 6, 7, 8 and 9. In addition, small farms (up to 10 hectares) will be exempt from conditionality controls and from the application of administrative penalties for non-compliance with conditionality requirements.
A new Food Security Law in China includes chapters on the protection of agricultural land from urbanisation, grain production, grain reserves, grain marketing and processing, and access to food in emergency situations. The law’s general provisions stipulate that the national food security strategy is based on self-reliance, guaranteed domestic production, moderate imports, and technological support.
Food chain
The Indonesian Quarantine Agency (IQA/Barantin) was established, integrating the former Agriculture Quarantine Agency (Barantan) under the Ministry of Agriculture and related units responsible for quarantine under the Ministry of Marine and Fisheries and the Ministry of Environment and Forestry. The new single agency is expected to improve efficiency and co-ordination, improve the quality of the quarantine services, and involve civil society in quarantine management.
The 3rd Comprehensive Seed Industry Development Plan (2023-2027) was announced in Korea to foster the seed industry as a high-value-added sector. This plan envisions and supports the development of a promising seed industry through technological innovation. This plan also includes training data experts for digital breeding, supporting programmes to enhance the link between corporate breeding and data, and opening government research facilities to facilitate the collection and analysis of genetic information for seeds by private companies.
Costa Rica launched the National System of Individual Identification and Traceability of Cattle aiming to improve animal health, food safety and access to export markets. The new system requires each animal to be registered and identified through visual and electronic means (ear tags and electronic transponders). An associated digital platform (Trazar-Agro) has been developed.
The Guidance on Sustainable Management for Food Industry was published in Japan. It is the first guidance with the overall goal of facilitating sustainable development within the food industry by illustrating how to tackle environmental, social, and governance (ESG) issues surrounding food companies. Argentina also approved its Bioeconomy Action Plan in the Agricultural Sector to guide policy efforts that promote the bioeconomy as a sustainable productive model.
A state aid scheme in Romania called INVESTALIM aims to support the development of food processing. Germany increased funding for its Protein Strategy, and Austria provided a package to support food processing companies to invest in resilience measures such as blackout prevention.
Consumer needs
The Czech Federation of Food Banks, in co-operation with the Ministry of Labour and Social Affairs of the Czech Republic, launched the Food Aid Distribution project. Within the existing network of 15 food banks, a new common network of 150 distribution centres was developed. These operate either as mobile distribution points (the so-called mobile distribution points) or at static locations in larger cities where food aid is regularly distributed to those in need.
Indonesia launched an in-kind rice distribution programme to low-income households in 2023, partially reversing the change towards cash transfers that took place in the last decade. This rice transfer programme is additional to a cash transfer programme already in place. India extended for five years the Pradhan Mantri Garib Kalyan Anna Yojana programme offering free food grains to the poorest segments of the population. The programme covers more than 800 million beneficiaries.
The Agri-Food Price Observatory was made available online in Portugal. The Observatory will monitor the costs and price of a food basket at the various stages of production and up to the point of sale, and is aimed at reinforcing information and transparency throughout the entire agri-food chain. The Observatory provides monthly information on a basket of 26 food products (e.g. eggs, fruit, olive oil, or dairy products), from production to consumption.
A Food Stamp Programme Walang Gutom 2027 aims to reduce hunger and malnutrition among food-insecure households in the Philippines by providing monetary assistance via Electronic Benefit Transfer (EBT) cards. One of its objectives is to reduce the high rate of child stunting, wasting, and micronutrient deficiency. The programme allows beneficiaries to buy selected food items from accredited or registered retailers or supermarkets or government-run KADIWA centres. Beneficiaries are required to attend training or to present certificates demonstrating their efforts to find employment. The objective is to feed one million beneficiaries over three years (300 000 beneficiaries in the first year, 300 000 in the second year, and 400 000 in the third year).
The National School Lunch Program and School Breakfast Program in the United States was amended to allow more schools operating in high poverty areas to offer free or reduced priced meals to all students. This expansion allows an estimated 3 000 more school districts in high-need areas the option to serve breakfast and lunch to all students at no cost.
Trade measures, agreements, and negotiations
A Free Trade Agreement was signed between Viet Nam and Israel (the VIFTA) on 25 July 2023 after more than seven years of negotiations. The agreement is the first between a Southeast Asian country and Israel. It will enter into force in 2024 and is predicted to drive an increase in bilateral trade turnover of nearly 150%.
Several trade agreements responding to the Russian war of aggression against Ukraine were extended, including the abolition of import duties and tariff quotas by the United Kingdom, Canada, and the European Union. Slovakia, Poland and Hungary, however, banned some imports, provoking Ukraine to file requests under the dispute resolution mechanism of the WTO.
In December 2023, Argentina abolished the role of the Ministry of Finance to design and implement export taxes and adjust their rates by decree. New prohibitions or restrictions on exports or imports for economic reasons or foundations can now only be carried out by law. Export taxes and restrictions applied to agricultural exports and imports are common in Argentina and a main policy tool.
Between October and December 2023, only pre-authorised economic operators in Romania were allowed to import wheat, maize, rapeseed, sunflower seed, sugar, and flour from Ukraine. The certificate of authorisation is delivered by the national sanitary and phytosanitary agency, following an approval delivered by a committee composed of the Ministry of Agriculture and Rural Development, Customs authority, Ministry of Economy, and the national sanitary and phytosanitary agency.
India introduced various export restrictions on rice. On 20 July 2023, it banned the export of non-basmati white rice (the notification includes provisions to allow non-basmati white rice exports of consignments requested by foreign governments for their food security needs). On 25 August 2023, India imposed a 20% export duty on parboiled non-basmati rice. On 27 August 2023, India also introduced Minimum Export Prices for basmati rice exports. On 8 December 2023, the government extended until 31 March 2024 a ban on the export of de-oiled rice bran, a major ingredient in the preparation of cattle and poultry feed (initially introduced in July 2023).
In 2023, China signed Free Trade Agreements (FTAs) with Ecuador (May 2023), Nicaragua (August 2023), and Serbia (October 2023). Under these agreements, China will provide enhanced market access for various agri-food products, such as bananas, cut flowers, cocoa, coffee, meat, sugar, peanuts.
The Philippines signed a bilateral Free Trade Agreement with Korea. The agreement improves market access for the Philippines for agricultural products such as bananas, processed pineapples and other tropical fruit, industrial products and selected services sectors. It includes provisions for capacity building and technical co-operation (including on smart farming) between both countries.
A Comprehensive Economic Partnership Agreement on Trade and Investment between Costa Rica and the United Arab Emirates was concluded in January 2024 following the launch of negotiations in March 2023.
This section presents the results of the latest support estimates. Chapter 1 provided an overview of support for OECD and EE countries as a group. This chapter focusses on how individual countries delivered policy support. The results reveal that countries take different approaches to supporting their producers. While most OECD countries offer only positive policy support, many of the 54 countries in the report use a mix of positive and negative support. In three countries, India, Viet Nam and Argentina, net support is negative. The composition of support is also quite varied, with some countries reliant on market price support (MPS) while others hardly using it at all.
Support across countries varied between 49% and -15% of gross farm receipts on average over 2021-23
Producer support as a share of gross farm receipts (%PSE) averaged 14% in OECD countries and 6.5% in emerging economies between 2021 and 2023. The highest levels of support as a share of gross farm receipts are all found in the OECD area (Figure 2.1). Norway, Iceland, Switzerland, Korea, and Japan all offer support greater than 30% of gross farm receipts (GFR). Mexico, Türkiye, Israel, China, the European Union, the United Kingdom and the Philippines offer support between 10% and 20% of GFR. India, Viet Nam and Argentina have net negative support due to implicit taxation of producers via policies that keep commodity prices low relative to world prices. In most countries, the level of support has decreased as a share of GFR over the last 20 years. Only China has significantly increased support as a share of GFR, from 5% in 2000-02 to 14% in 2021-23.
Price movements had a substantial effect on the PSE in 2023. MPS for eggs returned to historical averages after having spiked in 2022 because of shortages caused by bird flu. Changes in India drove movements in negative MPS estimated in 2023. India introduced export bans, duties or permits on several commodities to stabilise prices following the outbreak of war in Ukraine. This has the effect of making its MPS sensitive to world price changes. The effect was particularly pronounced for the MPS of Indian wheat, for which implicit taxation increased by close to USD 10 billion. Indian wheat single commodity transfers rose from -48% to -74% of wheat receipts in 2022 before declining to an estimated -25% of receipts in 2023, a change of USD 12 billion.
Countries with highest rates of producer support also tend to provide most general services
Japan, Switzerland and Korea delivered the most support in the form of general services in 2021‑23, each delivering more than 7% of the value of production. Norway, with the highest %PSE delivers the sixth highest amount of GSSE as a share of value of production, 3.8%. India provided the fourth highest, at 4%, demonstrating its mixed approach of supporting both producers and consumers in different ways. Thirteen countries in this report provide GSSE less than 2% of the value of production. Underinvestment in GSSE can put sustainable productivity growth at risk when farmers do not have the knowledge and infrastructure to maximise the value of their operations. These countries will be more reliant on private sector initiatives.
Infrastructure is the largest component of the GSSE overall, and this is especially true for Japan, which invests heavily in irrigation infrastructure related to paddy rice production. Irrigation is also an important component in Korea, Philippines, Türkiye, Chile and Viet Nam. Switzerland provides AIS, an important driver of innovation, amounting to 4.2% of the value of production, almost double the amount provided by Norway, the second-highest supporter of AIS. Korea and the European Union also have AIS as an important component of their AIS support. Inspection and control is a large share of general support spending in Iceland, Canada, New Zealand, Chile and the United Kingdom.
Consumer support largely follows market prices support in most countries, with some exceptions
In most countries, consumer support as a share of the value of production (%CSE) reflects the level of market price support. MPS is a transfer from consumers to producers (or vice versa), so the amount a producer receives from MPS is equal to what it costs the consumer. MPS accounts for most of the %CSE, but some countries also have important budgetary policies that support consumers. The United States provided the most budgetary support to consumers via assistance to low-income households, equal to 22% of the value of production in 2021-23 (Figure 2.3). India also provided substantial support to consumers, 8% of the value of production via the public distribution of food grains. Norway and Indonesia are the only other countries where budgetary support to consumers was greater than 1% of the value of production. Eleven countries provided no budgetary support to consumers at all.
India, the United States and Argentina provide the most support to consumers, India via a mix of budgetary support and MPS, the United States via budgetary support and Argentina via MPS alone. Korea, Iceland, Japan, Switzerland, and Norway, all have %CSE of -20% or greater of gross expenditures reflecting high levels of market price support to producers. Consumer support includes both support to final consumers of agricultural products as well as industry consumers who transform agricultural commodities into processed products.
Most countries continue to use the potentially most distorting forms of support
Based on past and ongoing OECD work, the types of support considered to have the potential to be the most distorting are market price support, payments based on output, and payments based on the unconstrained use of variable inputs. These forms of support are also known for being both inefficient and poorly targeted to those households most in need.
As a share of gross farm receipts (GFR), India is the largest user with such policies generating transfers equivalent to almost 40% of GFR, with a significant part of this in the form of negative MPS. Korea, Iceland, Japan, Norway, Indonesia and Switzerland all offer potentially most distorting forms of support in amounts greater than 20% of GFR (Figure 2.4). At the other end of the scale, this support amounts to only 0.24% of GFR in Australia, and for New Zealand, Chile and the United States this support is less than 1% of GFR.
While the countries that provide the highest %PSE still provide most support in potentially most distorting forms, the share of this support in the total has declined in Norway and Switzerland, who now provide about half of support in less distorting forms. The European Union and the United States make relatively little use of most distorting support when compared to their overall %PSE.
Market price support tends to be concentrated in a small set of commodities
Levels of support can differ between commodities in a given country. Few countries provide MPS support to all their major commodities. Countries can have a low rate of average MPS that masks the fact that some commodities are highly supported while others are relatively unsupported or implicitly taxed. For example, in Indonesia, MPS represented 0.2% of gross farm receipts in 2021-23. However, MPS represented 49% of the gross farm receipts specifically related to the production of sugar, and -39% of those related to the production of palm oil. Gross farm receipts for a specific commodity are referred to as “commodity gross receipts”, which includes the value of production of that specific commodity plus any transfers arising from policies specifically targeting that commodity.
In Korea, Japan, Iceland and Switzerland, MPS on the most supported product is between 68% to 80% of commodity gross receipts, but all countries save Korea have at least one MPS commodity for which market price support is estimated to be zero. MPS is calculated for 16 commodities in the United States, but only one of these (sugar, at 42%) has a non-zero MPS. In India and Viet Nam, MPS on the most implicitly taxed product ranges between -91% and -138% of commodity gross receipts, but these countries also provide positive MPS support for at least one commodity amounting to around 25% of receipts (Figure 2.5) (see Box 1.2 for more information on how MPS is calculated).
Percentage of commodity gross receipts
Note: A. Number of commodities for which market price support is estimated (MPS commodities). B. Number of MPS commodities with non-zero MPS values.
The ends of the whiskers represent the minimum and maximum values across commodities, while the boxes indicate ranges between the first and the third quartiles with the horizontal line inside indicating the median. Diamonds represent the market price support share in gross farm receipts for total agriculture. The minimum value for India is -113%
Source: OECD (2024), “Producer and Consumer Support Estimates”, OECD Agricultural policy monitoring (database), https://data-explorer.oecd.org/.
Less distorting forms of support are offered in many different ways
Some forms of support are considered potentially less distorting of production and trade. These include payments based on area, animal numbers, receipts or income (A/An/R/I) and payments based on non-commodity criteria. These are considered less distorting because they are not directly connected to the price or production quantity of a specific commodity, though sometimes they require production as a condition for eligibility.
The amount of support considered potentially less distorting, expressed as a percentage of gross farm receipts, increased in Switzerland, Iceland, Japan, Korea, China, India and Israel (Figure 2.6). In Switzerland, this reflects the growing importance of payments based on non-commodity criteria, which represented 6% of GFR in 2021-23, the highest of all the countries included in this report. Norway provides support equal to nearly 25% of GFR in less distorting forms, the majority of which requires some form of production. The European Union provides the most support where production is not required, at 6% of GFR. Among the emerging economies, China and India have begun offering this form of support, where they had previously provided only minimal amounts. China’s support of this type was 2.5% and India’s was 1.5% of GFR in 2021-23.
Percentage of gross farm receipts
Note: Figure presents countries having share of payments based on area, animal numbers, farm receipts or farm income (A/An/R/I) and on non-commodity criteria above 1% for 2021-23 period. Countries are ranked according to the total share of payments for 2021-23. The European Union refers to EU15 for 2000-02, and EU27 for 2021-23. No data available for the United Kingdom for 2000-02.
Source: OECD (2024), “Producer and Consumer Support Estimates”, OECD Agricultural policy monitoring (database), https://data-explorer.oecd.org/.
In most countries, the level of support has decreased as a share of GFR over the last 20 years. This largely reflects increases in the value of production, as overall support is near historic highs in nominal terms. Only China has significantly increased support as a share of GFR, from 5% in 2000-02 to 14% in 2021‑23. Support varied between 49% (Norway) and -15% (India) of gross farm receipts on average over 2021-23, demonstrating the broad scope of policy objectives pursued by countries in this report.
Japan, Switzerland and Korea deliver the most support in the form of general services in 2021-23, each delivering more than 7% of the value of production. Infrastructure is the largest component of the GSSE overall, and Japan, Korea, Philippines, Türkiye, Chile and Viet Nam are the most concentrated on this form of general support. Switzerland provides the most support to agriculture knowledge and information systems, 4.2% of the value of production. Support to AKIS is generally increasing in OECD countries and decreasing in emerging economies as a percentage of the value of production, a fact which is troubling for the prospects for sustainable productivity growth in emerging economies.
The amount of support to consumers generally follows the pattern of MPS, as this is a transfer between consumers and producers. However, some countries provide budgetary support to consumers. This is generally focussed on low-income households. The United States, India, Norway, Indonesia and Brazil spend the most on this.
The forms of support that are potentially most distorting of production or trade are the largest share of the total, a situation that has been true for many years. India is the largest user; almost 40% of .gross farm receipts. On the other hand, some countries make little use of this form of support. In Australia, New Zealand, Chile and the United States this support is less than 1% of GFR. The share of this support in the total has declined substantially in countries like Norway and Switzerland, who have historically made the most use of this support as a percentage of GFR. The share of support overall masks considerable variation in support by commodity within countries. In fact, a country may support one commodity while taxing another, making the overall total more difficult to interpret.
Most support considered potentially least distorting is based on current or historical area, animal numbers, receipts or incomes. The use of payments based on non-commodity criteria remains relatively rare. This type of support can be used to deliver environmental and social goods to the public. Of the countries in this report, Switzerland and Mexico offer the most support based on non-commodity criteria, as a percentage of GFR.