Agricultural Policies in Emerging Economies

2074-3068 (online)
2074-3076 (print)
Hide / Show Abstract

This report monitors agricultural policy developments in various countries following the same approach applied to OECD countries, providing a common benchmark for evaluating reforms and for facilitating international dialogue.

Also available in French
  • 2009
Agricultural Policies in Emerging Economies 2009

Last edition

Agricultural Policies in Emerging Economies 2009

Monitoring and Evaluation You do not have access to this content

Click to Access:
  • PDF
  • READ
17 Mar 2009
9789264059283 (PDF) ;9789264059276(print)

Hide / Show Abstract

This report analyses policy agricultural developments during 2006-08 in seven economies: Brazil, Chile, China, India, Russia, South Africa and Ukraine. This period was marked by a significant increase in world prices for most, but not all, agricultural commodities. Policy responses to rising food prices included tariff reductions, export restrictions, increased minimum prices and price controls, input subsidies, sales of stocks and direct transfers to the most disadvantaged. Other major common policy developments included: expanded government-supported credit facilities and/or debt rescheduling, endeavours to improve the delivery and performance of agricultural policies, extended coverage of insurance programmes and further efforts in land reform. A comprehensive statistical annex containing a wide range of contextual information for these economies is also included in this report.

Estimates of support to agriculture in six economies (India is not yet covered) from 1995 to 2007 are provided, in conformance with recent changes to the OECD measurement methodology. This allows a consistent comparison across emerging economies and with OECD countries in terms of changes in the level and composition of support to producers and the sector as a whole.

loader image

Expand / Collapse Hide / Show all Abstracts Table of Contents

  • Mark Click to Access
  • Executive Summary
    This report monitors and evaluates government support to agriculture in seven emerging economies during 2006-08: Brazil, Chile, China, India, Russia, South Africa and Ukraine. While the economic importance of the agricultural sector is falling relative to other sectors in these countries, the sector continues to play a vital role in providing employment and contributing to food security. Although weather conditions can cause large short-term fluctuations, over the longer-term both agricultural production and, in particular, agro-food trade are growing rapidly. Brazil, Chile, India and Ukraine are net exporters of agro-food products, while China and Russia are net importers.
  • Overview
    This chapter provides an overview of developments over the period 2006 to 2008 in agricultural policies in seven emerging economies: two from the South American continent (Brazil and Chile); two from Asia (China and India): two from Europe (Russia and Ukraine) and one from Africa (South Africa). A separate chapter for each of the seven economies, providing in-depth analysis and commentary, follows this overview. The first section discusses developments in world food markets, with a particular emphasis on the significant increase in global agricultural prices. Policy responses to higher food prices, along with other significant policy changes and new initiatives are then described. The global spread of the seven economies, their net trade positions (net exporters and net importers) and their differing policy objectives provide for an interesting contrast in terms of government policy responses to the challenge of food price inflation. The third section examines changes in the level and composition of agricultural support since 1995-97, a period which coincides with the beginning of implementation commitments made under the Uruguay Round Agreement on Agriculture (URAA), and makes comparisons between these economies and with the OECD country averages. Finally, some policy conclusions are offered both in terms of specific responses to higher agricultural prices and the general direction of agricultural policy in these seven emerging economies.
  • Brazil

    Brazil provides a relatively low level of support and protection to agriculture, reflecting its position as a competitive exporter and a relatively open trade policy. While increasing in nominal terms, the level of producer support has been relatively constant at 5% of gross farm receipts since 2000, with producer prices on average only 3% above world prices. ?

    Nevertheless, there is a wide range and growing number of agricultural policy measures. Price supports have been used extensively, in principle to offer price stability (minimum guarantee prices are set at low levels) and to provide localised support to smaller "family" farmers. There is also heavy state intervention in the credit system, both creating access to credit and rescheduling debt commitments.

  • Chile
    Chile has a relatively open trade policy with support historically concentrated on a few commodities. The country operates a price band system (PBS) for wheat, wheat flour and sugar, but with high world prices and reforms to the PBS necessary in order to comply with WTO obligations, the economic significance of the PBS has diminished. Across the sector, price support has continued to decline and farm prices are now almost exclusively market determined.
  • China
    China increased the market orientation of its agricultural sector prior to its WTO accession in 2001, but since then this trend has slowed and for some markets even reversed. In particular, grain markets have been exposed to multiple government interventions, further exacerbated by the rise in global prices for agricultural commodities in 2006-08, which intensified inflationary pressures and food security concerns.
  • India
    Compared to the robust growth in other sectors of the economy, the performance of Indian agriculture remains rather poor as indicated by slow and erratic growth rates since the mid-1990s. This has become a key concern of the government as confirmed by the main objective of the 11th Five Year Plan for 2007-12, to make growth more inclusive.
  • Russia
    Russia maintains high border protection for key agricultural imports and budgetary transfers to the agricultural sector are increasing. With high economic growth boosting consumer incomes and raising government revenue, the government has pursued an increasingly protective policy. The level of producer support rose in the current decade compared with the recent low which followed the 1998 financial crisis.
  • South Africa
    Current policies in South African agriculture are the result of substantial reforms implemented from the mid-1990s. Policy changes that impacted on agriculture resulted in deregulation of the marketing of agricultural products, liberalisation of domestic markets, and reduced barriers to agricultural trade. The main developments in trade policy included the replacement of direct controls over imports by tariffs, removal of state controls over exports and elimination of export subsidies. These reforms reduced market price support and budgetary support to commercial farming. In contrast, increased budgetary spending went to finance the land reform process.
  • Ukraine
    The overall level of producer support is modest, but disguises taxation of export-oriented sectors and considerable protection of import-competing sectors. Support has shown an upward trend in recent years. This tendency, although interrupted in 2007 due to the specific market situation, is an expected consequence of the economic recovery Ukraine saw in recent years. Robust growth in the domestic economy and external demand has lifted agricultural prices towards world market levels. Fiscal improvements resulted in more direct support provided to the sector.
  • Annexes
  • Add to Marked List
Visit the OECD web site