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  Main Policy Developments in 2002

  This chapter highlights major changes or new initiatives that occurred in agricultural policy in OECD countries in 2002. Details of these may be found in the country chapters that follow. The year 2002 saw several significant policy developments, notably the United States’ Farm Security and Rural Investment Act of 2002 (2002 Farm Act) and the proposals for the reform of the EU’s Common Agricultural Policy (CAP). EU enlargement plans and preparations for the next WTO round saw some progress in 2002, but their potential impact on agricultural policy is uncertain. Environmental issues and organic production continued to receive increased attention by governments, which are showing an increasing desire to look at agricultural policy in a broader and more integrated context of environment, food safety, structural adjustment, rural development and other issues.

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  Evaluation of Policy Developments

  Agricultural policies in 2002 were implemented in the context of a weakening US dollar and world prices that were considerably lower for livestock products, especially for pork, poultry and milk powders, but significantly higher for crops, in particular for wheat. There were no major changes in the main policy instruments used by OECD countries with the important exception of the 2002 Farm Act in the United States. However, 2002 was a transitional year, covered by both the 1996 and 2002 Farm Acts, but still largely influenced by the 1996 legislation. The 2002 Farm Act will play a significant role in the evolution of United States agriculture and world markets over the next six years.

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  Analysis of the 2002 Farm Act in the United States

  The Farm Security and Rural Investment Act of 2002 (2002 Farm Act) was signed on 13 May 2002 and will be in effect for the period 2002-07. It includes a wide range of programmes for commodities, conservation, trade, nutrition, credit, rural development, research, forestry initiatives and energy, and replaces the Federal Agriculture Improvement and Reform Act of 1996 (1996 Farm Act), which provided the basic legislation governing farm policy during the period 1996-2002.

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  Agri-environmental Policies in OECD Countries

  Agriculture has a major impact on the environment in OECD countries. It accounts for around 40% of total OECD land use and nearly 45% of water use, and, in many countries, dominates and shapes the landscape.15 Agricultural activities have both beneficial and harmful effects on the environment through changing the quality or quantity of soil, water, air, natural habitats, biodiversity and landscapes. The relative importance of different environmental issues depends on the effects of farming practices at the local, regional, national and international levels, which in turn reflects variations in ecological and climatic factors. The scope and priority accorded to different environmental issues can also vary across countries and regions, depending on such factors as population density, income levels and the value attached to cultural heritage.

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  Annexes
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  Country Chapters

  This part of the report provides detailed background information on agricultural policies of each OECD country using a standard format. The main policy instruments are described, followed by developments in domestic agricultural policies during 2002. For the EU, additional information is provided on policy developments in each Member State, concentrating on those implemented by the national authorities. Developments in trade policy are described under a separate heading. An overall evaluation, which includes a summary of changes in the level and composition of support, concludes each country chapter.

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  Summary Tables on Estimates of Support to Agriculture

  Part II of the Monitoring and Evaluation provides detailed background information on agricultural policies of each OECD country using a standard format. The main agricultural policy instruments are described, followed by developments in domestic agricultural policies and trade policy during 2002. An overall evaluation, which includes a summary of changes in the level and composition of support to agriculture, concludes each country chapter. The analysis is complemented in Part III with a standard set of Summary Tables on estimates of support to agriculture for OECD and each OECD member country. These tables include the standard indicators of support to agriculture used in OECD analysis: the Producer Support Estimate (PSE), the Consumer Support Estimate (CSE), the General Services Support Estimate (GSSE) and the Total Support Estimate (TSE) as well as the derived indicators such as the Producer and Consumer Nominal Protection Coefficient (NPC) and Nominal Assistance Coefficient (NAC)

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