Agricultural Policy Monitoring And Evaluation 2024 Report:
The Organisation for Economic Co-operation and Development (OECD) in its Agricultural Policy Monitoring and Evaluation 2024 report highlighted that India implicitly taxed its farmers USD 120 billion in 2023, the highest among 54 countries.
- This is a result of government policies like export bans and duties, which aim to keep food prices low for consumers but impose significant costs on the agricultural sector.
Key Highlights of the OECD’s Report:
- Total support for the agricultural sector across 54 countries averaged USD 842 billion per year from 2021 to 2023. Although it dropped in 2022 and 2023 compared to the 2021 peak, it still remained much higher than levels before the Covid-19 pandemic.
- Market Price Support (MPS) fell by USD 28 billion between 2021-23 but still remained a major part of total support.
- MPS is a policy measure that aims to keep the price of a specific agricultural product on the domestic market at a certain minimum (government set) level, which helps to raise domestic prices above world prices.
- In 2023, India’s export restrictions on rice, sugar, onions, and de-oiled rice bran led to a negative MPS, causing a USD 110 billion loss.
- As a result, farmers received less for their produce than they would have without these policies, leading to a significant reduction in their income.
- India’s overall market price support in 2023 was negative, amounting to a USD 110 billion loss, meaning farmers received less for their produce than they would have without these policies.
- India had the highest negative price support, followed by Vietnam and Argentina. India accounted for 62.5% of all global negative price support in 2023.
- This share has grown significantly from 61% in 2000-02 to 75% in 2021-23, highlighting the increasing burden on Indian farmers.
- Despite positive support through subsidies and Minimum Support Price(MSP) totaling USD 10 billion, the price-depressing policies overwhelmed these measures.
- Ongoing conflicts, such as Russia’s war against Ukraine and unrest in the Middle East, have disrupted agricultural markets, particularly affecting trade and global supply chains.
- The increasing frequency and severity of extreme weather events continue to challenge agricultural production and productivity.
- Some countries have implemented export restrictions, further distorting international trade in agricultural commodities
- Increasing farmer’s protests across nations underscore the economic and social struggles faced by farmers, reflecting deep-seated issues in agricultural systems.
- Global agricultural productivity growth has slowed, threatening the ability to meet growing global food demands while maintaining sustainability.
- Governments are linking payments to farming practices that support land health, biodiversity, and sustainability, but Environmental Public Goods Payments(EPGP) make up only 0.3% of total producer support.
- EPGP is a way to fund the provision of public goods that benefit the environment, such as climate protection.
