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GOAL AND TARGET ADDRESSED

Goal 8. Develop a global partnership for development.
Target 8A. Develop further an open, rule-based, predictable, non-discriminatory trading and financial system. Includes a commitment to good governance, development and poverty reduction—both nationally and internationally.
Target 8B. Address the special needs of the least developed countries. Includes: tariff and quota-free access for least developed countries’ exports; enhanced programme of debt relief for HIPCs and cancellation of official bilateral debt; and more generous ODA for countries committed to poverty reduction.


DEFINITION AND METHOD OF COMPUTATION

Definition
The agricultural support estimate for OECD countries as a percentage of their GDP is defined as the value of agricultural support in the form of transfers to agricultural producers in a country as a percentage of the gross domestic product (GDP) of the country.

Concepts
Agricultural support to producers is the annual monetary value of all gross transfers from taxpayers and consumers, measured at the farm gate level, arising from policy measures that support agriculture, , net of the associated budgetary receipts, to agricultural producers regardless of the transfer’s objectives and impacts on farm production and income. For agricultural products, the total support estimate (TSE) represents the overall taxpayer and consumer costs of agricultural policies. When expressed as a percentage of GDP, the total support estimate is an indicator of the cost to the economy as a whole.

Gross domestic product (GDP) is an aggregate measure of production equal to the sum of the gross values added of all resident institutional units engaged in production (plus any taxes, and minus any subsidies, on products not included in the value of their outputs).

Agricultural products comprise plant and animal products, including tree crops but excluding timber and fish products.

Total Support Estimate (TSE) is the sum of the explicit and implicit gross transfers from taxpayers and consumers of agricultural commodities to agricultural producers net of the associated budgetary receipts. The TSE includes support to individual farmers from trade barriers that keep domestic farm prices above those on world markets, budget-financed payments, input subsidies, consumer food subsidies and support to general services provided to the agricultural sector as a whole.

Method of computation
This indicator is calculated by dividing the agricultural TSE by the GDP and multiplying by 100.

RATIONALE AND INTERPRETATION

In penetrating foreign markets, developing countries face not only tariffs but competition from products in developed countries that benefit from government subsidies. This is especially the case in the agricultural products sector. The challenge linked to the Doha Development Agenda is to further reduce production and trade-distorting support and implement policies that effectively address both domestic and international goals, while ensuring well-functioning markets.

SOURCES AND DATA COLLECTION

Estimations of TSE are computed by the OECD Secretariat based on data and policy information obtained from national authorities.

DISAGGREGATION

The TSE can be further disaggregated into Producer Support Estimate – PSE (direct transfers to the farmers) and General Services Support Estimate – GSSE (public expenditures financing services provided to the farming sector as a whole). In relative terms the PSE is expressed as a share of gross farm receipts (%PSE), which is the main indicator used to compare direct support to farmers across countries and over time. The PSE can also be disaggregated into categories based on payment implementation criteria. The PSE has an aggregate element of Market Price Support per commodity.

COMMENTS AND LIMITATIONS

This indicator excludes general welfare payments to farmers.

GENDER EQUALITY ISSUES

In most developing countries, women participate in all phases of agricultural production. Hence, any changes that affect competition in agricultural production will particularly affect the lives of women. The indicator cannot be disaggregated by sex.

DATA FOR GLOBAL AND REGIONAL MONITORING

Data for this indicator at the international level are reported by the Organisation for Economic Co-operation and Development (OECD). Data on agricultural support are produced by the OECD Directorate for Trade and Agriculture. The source data are directly provided by the 30 OECD members, and the OECD Secretariat is responsible for producing the agricultural support/GDP indicator.

Regional and global aggregates are made by straight addition and do not involve any estimation for missing values.

SUPPLEMENTARY INFORMATION



EXAMPLES



REFERENCES

ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT (2008). The PSE Manual 2008. Paris. Available from www.oecd.org/agriculture/PSE

ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT (2007). Producer and Consumer Support Estimates, OECD Database 1986-2011. Paris. Internet site http://www.oecd.org/agriculture/PSE

ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT (biennial). Alternating: Agricultural Policies: Monitoring and evaluation, OECD Countries and Agricultural Policies: Monitoring and evaluation, OECD Countries and Emerging Economies Paris. Available from OECD publications.

UNITED NATIONS, COMMISSION OF THE EUROPEAN COMMUNITIES, INTERNATIONAL MONETARY FUND, ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT AND WORLD BANK (1994). System of National Accounts 1993 (SNA 1993). New York. Available with updates from http://unstats.un.org/unsd/sna1993.

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