Line charts of support relative to some measurement of country's value of production in agriculture. 1986 or 1995 to 2010, 2011 or 2012. Covers eight of the largest agricultural producer countries in the world. Shows data from the World Bank (nominal rate of assistance), OECD (General Services Support Estimate and Producer Support Estimate) and members' notifications to the WTO ("green box" as per Annex 2 and non-"green box"). Some reflections on direction and implications of trends.

1. Worldwide trends in
support to agriculture
Lars Brink
Symposium on Agricultural Policy, Trade and the Environment
University of Lethbridge, Alberta, Canada
25 October 2013
Lars.Brink@hotmail.com

2. Setting the stage
• Measurements of farm support
– World Bank: economic measurement
– OECD: economic measurement
– WTO: domestic support, measured in particular way
» “Domestic support” is WTO term
» Budgetary support and administered pricing (AP) support
• Excludes support through, e.g., tariffs, hence “domestic”
» But much AP support depends also on border protection
• Eight countries with 68% of world value of agr. production
– By size of agr.: China, EU, US, India, Indonesia, Japan, Brazil, Russia
WTO developed
WTO developing
EU, US, Japan, Russia
China*, India, Indonesia, Brazil
* Special parameters for China
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3. Nominal Rate of Assistance to agriculture: EU, Japan, Russia, US
Japan
EU
Russia
US
170%
160%
150%
140%
130%
120%
110%
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
-10%
-20%
-30%
-40%
-50%
Source: nra_totd; Anderson, K. and S. Nelgen. 2013. “Updated … Estimates of Distortions to Agricultural Incentives, 1955 to 2011”, www.worldbank.org/agdistortions
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4. Nominal Rate of Assistance to agriculture: Brazil, China, India, Indonesia
45%
40%
35%
30%
China
25%
India
20%
15%
10%
Brazil
5%
0%
-5%
Indonesia
-10%
-15%
-20%
-25%
-30%
-35%
-40%
-45%
-50%
Source: nra_totd; Anderson, K. and S. Nelgen. 2013. “Updated … Estimates of Distortions to Agricultural Incentives, 1955 to 2011”, www.worldbank.org/agdistortions
4

5. OECD GSSE as % of Value of production: EU, Japan, Russia, US
GSSE: General Services Support Estimate
25%
20%
US
15%
Japan
10%
Russia
5%
EU
0%
Source: calculated from PSE and CSE Database, OECD, 2013
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6. OECD GSSE as % of Value of production: Brazil, China, Indonesia
No data for India
GSSE: General Services Support Estimate
25%
20%
15%
10%
China
5%
Brazil
Indonesia
0%
Source: calculated from PSE and CSE Database, OECD, 2013
6

7. OECD PSE as % of Value of production: EU, Japan, Russia, US
PSE: Producer Support Estimate
70%
65%
Japan
60%
55%
50%
45%
EU
40%
35%
30%
25%
Russia
20%
15%
US
10%
5%
0%
Source: calculated from PSE and CSE Database, OECD, 2013
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8. OECD PSE as % of Value of production: EU, Japan, Russia, US
PSE: Producer Support Estimate
70%
65%
Japan
60%
55%
50%
45%
EU
40%
35%
30%
25%
20%
15%
US
10%
5%
0%
Source: calculated from PSE and CSE Database, OECD, 2013
8

9. OECD PSE as % of Value of production: EU, Japan, Russia, US
PSE: Producer Support Estimate
130%
110%
90%
Japan
70%
EU
50%
30%
US
Russia
10%
-10%
-30%
-50%
-70%
-90%
-110%
-130%
Source: calculated from PSE and CSE Database, OECD, 2013
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10. OECD PSE as % of Value of production: Brazil, China, Indonesia
PSE: Producer Support Estimate
No data for India
25%
Indonesia
20%
15%
China
10%
Brazil
Indonesia
5%
0%
-5%
China
Brazil
-10%
-15%
-20%
Source: calculated from PSE and CSE Database, OECD, 2013; Indonesia -90% in 1998 replaced by average of 1997 and 199910

11. Green box support as % of Value of prod’n: EU, Japan, Russia, US
40%
35%
US
30%
25%
Japan
20%
15%
EU
10%
Russia
5%
0%
Source: calculated from WTO Transparency Toolkit; Russia from accession data
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12. Green box support as % of Value of prod’n: Braz, China, India, Indo
12%
10%
China
8%
6%
4%
Brazil
India
2%
(Indonesia)
Indonesia
0%
12
Source: support calculated from WTO Transparency Toolkit; VOP from TN/AG/S/21/Rev.5, FAOSTAT, and OECD PSE database

13. Non-Green-box support as % of Value of prod’n: EU, Japan, Russia, US
35%
30%
25%
20%
15%
EU
10%
Japan
5%
Russia
US
0%
Source: calculated from WTO Transparency Toolkit; Russia from accession data
13

14. Non-Green-box support as % of Value of prod’n: Braz, China, India, Indo
10%
9%
8%
India
7%
6%
5%
Brazil
4%
3%
2%
China
Indonesia
1%
0%
-1%
14
Source: support calculated from WTO Transparency Toolkit; VOP from TN/AG/S/21/Rev.5, FAOSTAT, and OECD PSE database

15. Rising support in large developing countries
• From very low levels to levels not seen before
– Support levels now rival or may soon rival those of
some large developed countries
• “High-support” and “Low-support” developing
countries
– Need to recognize emerging differentiation
– Diverging international interests – how to reconcile?
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16. Farm support rises with economic growth?
• Policy choices decide size and nature of support
– Korea and Taiwan raised farm support as economies grew
– Chile and South Africa, for example, chose different path
• Competitive and growing world exporters in agriculture and food
• No AMS* support; no or very little Article 6.2 support
• Emphasis on Green Box support
• WTO limit on only one type of support
• No limit on certain investment and input subsidies (Article 6.2)
• No limit on price support without administered prices
– Can be large if tariff bindings are large
• No limit on Blue Box and Green Box support
* Aggregate Measurement of Support: support through measures not meeting any criteria for exemption from WTO commitment
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17. Emphasize what kind of domestic support?
• Support that remunerates production directly, e.g.,
• Input subsidies
• Output subsidies
• Administered pricing
• Support that meets WTO Green Box criteria, e.g.,
• Research, marketing and promotion and infrastructural services
• Providing relief from natural disasters
• Implementing environmental programs
• Which mix of agricultural policy support is more apt
to underpin development that is sustainable?
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18. Selected references
Anderson, K. and S. Nelgen. 2013. Updated National and Global Estimates of Distortions to Agricultural Incentives, 1955 to 2011. Washington, D.C.
http://econ.worldbank.org/WBSITE/EXTERNAL/EXTDEC/EXTRESEARCH/0,,contentMDK:21960058~pagePK:64214825~piPK:64214943~theSit
ePK:469382,00.html Documentation of estimation methods; estimates for Brazil, China, European Union, India, Indonesia, Japan, Russia,
United States (also for more than 70 other countries).
Brink, L., D. Orden and G. Datz. 2013. BRIC Agricultural Policies Through a WTO Lens. Journal of Agricultural Economics, 64(1): 197-216.
onlinelibrary.wiley.com/doi/10.1111/1477-9552.12008/abstract Analysis of domestic support and underlying policies in Brazil, China, India,
Russia.
Brink, L. 2014 (forthcoming). Farm support in Ukraine and Russia under the rules of the WTO. In Transition to Agricultural Market Economies: The
Future of Kazakhstan, Russia, and Ukraine, ed. A. Schmitz and W. Meyers. Cambridge, USA and Wallingford, UK: CABI.
Orden, D., D. Blandford, and T. Josling (eds.). 2011. WTO Disciplines on Agricultural Support: Seeking a Fair Basis for Trade. Cambridge, Cambridge
University Press. Chapters on WTO rules on domestic support, Brazil, China, European Union, India, Japan, United States (also Norway and
the Philippines).
Orden, D., D. Blandford, T. Josling, and L. Brink. 2011. WTO Disciplines on Agricultural Support: Experience to Date and Assessment of Doha
Proposals. IFPRI Research Brief 16. www.ifpri.org/publication/wto-disciplines-agricultural-support Elaboration on material in Orden,
Blandford, Josling (eds.) 2011 book.
OECD (Organization for Economic Cooperation and Development). 2013. Producer and Consumer Support Estimates database.
www.oecd.org/agriculture/agricultural-policies/producerandconsumersupportestimatesdatabase.htm Documentation of estimation
methods; estimates for Brazil, China, European Union, Indonesia, Japan, Russia, United States (also other OECD countries and some other
non-OECD countries).
WTO (World Trade Organization). 2013. Members’ transparency toolkit. Domestic support: Table DS:1 and the relevant Supporting Tables.
www.wto.org/english/tratop_e/agric_e/transparency_toolkit_e.htm Data from notifications of Brazil, China, European Union, India,
Indonesia, Japan, United States (also from more than 90 other Members; no notification from 2012 new Member Russia).
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19. Thank you for your attention!
Lars.Brink@hotmail.com