The Implementation Costs of Agricultural Policies

image of The Implementation Costs of Agricultural Policies

Concerns about the cost of implementing and monitoring agricultural policies are mounting with the development of more decoupled and targeted policies. While these costs are inherent in the policy process, reducing them will bring benefits in terms of better use of public funds, and minimising the overall economic costs of policies. The report suggests ways to do so without compromising the aims of the policies. Ways to reduce costs include sharing experiences across agencies, regions or countries, exploiting already existing administrative networks, integrating government and private information systems, reducing the number of agencies and using the latest information technologies.

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A Case Study of the Policy-related Transaction Costs of PROCAMPO Payments in Mexico

Under the PROCAMPO programme of Mexico, eligible farmers receive payments based on the area planted during an historical base period (1991-93) on the condition that the land is used for legal agricultural or livestock production, or within an environmental programme. In 2002, PROCAMPO granted payments to over 2.7 million farmers for an area corresponding to 13.9 million hectares (i.e. 58% of the total agricultural area). The PROCAMPO programme is administered by ASERCA, a decentralised body of the Secretariat for Agriculture, Livestock, Rural Development, Fisheries and Food (SAGARPA). ASERCA distributes and processes application forms, checks the eligibility of applicants, proceeds with the payment and maintains the database containing information on registered farmers, land use and payment levels. ASERCA also uses a Geographical Information System to monitor eligibility, check compliance and evaluate the environmental impact of the programme.

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