Ag subsidies continue to rise, OECD says

by Emily Wilson
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Market and trade distorting support to agricultural production increased in 1999 for the second year in a row, according to the Office of Economic Development's latest report on agricultural policies in OECD countries. The OECD said the report makes clear "that despite a commitment by OECD governments, efforts to achieve agricultural policy reform can slow down or reverse in the face of market pressures."

Support to agriculture cost consumers and taxpayers U.S.$361 billion in 1999, the OECD said. "Overall support to producers has now returned to the levels of the mid-1980s, after falling during much of the intervening period."

Last year, government support totalled 40% of producers' gross receipts, the OECD said. Two-thirds of support to agriculture came directly from consumers' pockets, with government budgets, financed by taxpayers, contributing the rest. "Reform would free up resources that could be better spent in other ways, and would mean that consumer preferences, rather than government policies, would guide producer decisions," the organization said.