Abstract
Agricultural support is one of the main tools used by governments to achieve their domestic goals, especially since the food shortages during and immediately after World War II. However, specific agricultural support programs can affect agricultural production in various ways, and support programs can alter the allocation of natural resources domestically and abroad. In this study, we measured agricultural support in OECD-reported countries during the period 2000-2019 using Spearman´s correlation coefficient, time trend analysis and clustering procedures. Data from Organization for Economic Co-operation and Development (OECD) from 2000 to 2019 were employed, specifically the Producer Support Estimate (PSE) and Consumer Support Estimate (CSE). We compared the results of two agglomerative clustering methods and identified groups of similar countries on the basis of their consumer support and producer support estimates behavior during the period studied. Some countries, such as Switzerland, South Korea, Turkey and Canada, displayed specific support behavior, while other groups of countries shared similarities such as China, Indonesia and the Philippines; the European Union, Japan and Norway; and Brazil, South Africa and Chile. Policies implications are discussed and further research is recommended, including analyses of top-down geographical unities, crop-specific programs, and the effects of the COVID-19 pandemic on agricultural support worldwide, as more data becomes available.
Highlights
Agricultural subsidies have always been a contentious issue in multilateral trade negotiations
At the 1% significance level, most OECD-reported countries displayed a trend over time for Producer Support Estimate (PSE) and Consumer Support Estimate (CSE) estimates during 2000–2019
Ukraine, New Zealand, Kazakhstan, Israel, Iceland, India, Costa Rica, Argentina, and Russia did not display a significant trend for either estimate; they were excluded from the step
Summary
Agricultural subsidies have always been a contentious issue in multilateral trade negotiations. During several General Agreement on Tariffs and Trade rounds, discussions on agricultural products have been set aside, and some attempts to better align agricultural subsidies were deferred. During the Uruguay Round (1986-1994) there was a concerted effort to improve the rules concerning export and domestic subsidies related to agricultural products and foodstuffs, and a decision was made to try to reduce them gradually. The Doha Round, from 2000 onward, saw progress in implementing that decision, and agricultural subsidies have declined over the last two decades. Lower levels of agricultural subsidies imposed by significant players such as the US, the European Union (EU) and China are crucial in minimizing their impact on agricultural markets worldwide and generating more favorable conditions and market-oriented prices for agricultural producers in developing countries
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