Most Agricultural Support Fails to Target Farmers Most in Need, Says New OECD StudyTuesday, Jan 21, 2003
A large proportion of government support to agriculture does not go to the farmers who need it most, says a new OECD report. Moreover, such support is inefficient in providing increased income for farmers and distorts production and trade, the study adds.
The study shows that because most support is production-based, the bulk of it goes to the larger, often the richer, farms. In the case of support to the market price of a commodity, the study estimates that only 25% of the funding ends up as a net income gain for the farmers.
Farm household incomes are on average close to those of other households, the report adds, but increasingly it is through non-agricultural wages and salaries, investments and social payments that those working in agriculture are able to maintain such income levels. Similarly, although large income disparities remain among farmers, they are being reduced by non-agricultural revenues.
The report, proposes more efficient and equitable ways for governments to ensure farm households have decent incomes.