1. Dimitris Diakosavvas Trade and Agriculture Directorate OECD
Meeting the Policy Challenges for Sustainable Productivity Growth – An OECD Perspective
Dimitris Diakosavvas
Trade and Agriculture Directorate
OECD
Pre-congress symposium «The Need for Policy Coherence towards Sustainable Productivity Growth», 2017 EAAE Congress, Parma, 29 August 2017.

2. Outline of presentation
Context
Key challenges facing agriculture
Role of policy in addressing these challenges
Level and composition of agricultural support
Key lessons – need for further reform

3. What is OECD?
In 56 years of existence, its member countries totalled 35, plus the European Union:
Australia
Austria
Belgium
Canada
Chile
Czech Rep.
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Iceland
Ireland
Israel
Italy
Japan
Korea
Latvia
Luxembourg
Mexico
Holland
New Zealand
Norway
Poland
Slovenia
Portugal
Slovakia
Spain
Sweden
Switzerland
Turkey UK
USA
… and formal accession talks are underway with Colombia, Costa Rica, Lithuania, and enhanced co-operation with Brazil, China, India, Indonesia and S. Africa

4. Context

5. Good prospects for agriculture…
Market conditions are broadly consistent with market fundamentals

6. .. but agriculture is facing a multitude of challenges
Old issues that remain relevant
Income support
Food security
Food safety
Competitiveness
Equity

7. Agriculture is facing a multitude of challenges
Old issues that remain relevant
Income support
Food security
Food safety
Competitiveness
Equity
New and emerging challenges
Sustainable use of natural resources
Climate change
Changing citizen demands
Innovations – 4th industrial revolution

8. Emerging challenges are global
Key question for policy is to enable the sector to respond to global challenges:
provide enough food, feed, fibre and fuel for 9 billion people in 2050…
…with greater pressure on land, water, energy and biodiversity resources - and the impact of climate change…
…and the need to limit the harmful and enhance the beneficial environmental impacts and reduce waste in the food supply chain, while addressing social concerns.

9. The policy challenge

10. The policy challenge …
Policies that mutually reinforce growth and green –
Increasing productivity in a sustainable manner
Investing in knowledge generation (R&D, innovation)
Investing in knowledge creation and adoption – training, advisory and extension services
Investment and trade
Policies specifically aimed at greening growth
Market-based instruments
Agri-environmental payments, environmental taxes, etc.
Non-market instruments
Regulation, voluntary agreements, technical assistance
But a lot of green is not priced..

11. Progress with decoupling GHG emissions from production growth

12. … but confusing evidence on productivity improvements

13. Declining trends and wide variations of support to farmers across countries …
OECD = €199 mill
(%)

14. Important changes in the structure of support to producers

15. Total Support Estimate, 2014-16
Beneficiaries
Consumers = 1%
Producers = 88%
General Services =
11%
Total Support Estimate (TSE) = €98 bill.
Components of Total Support Estimates
All transfers from taxpyrs and cons'rs, net receipts
This can be done either of 2 ways
PSE + Transfers from taxpyrs to cons'rs + GSSE
OR, sum of
Transfers from cons'rs and from taxpyrs to prod'rs
Less any budget revenues (levies, fees)
Remember:
This is a way to start with the budget
Divide it by IMPLEMENTATION mechanism; The CRITERIA to get pymt
NOT by purpose or objective
Economic content is in implementation -- not purpose
What decision is required to get pymt?
That decision is distorted by support
Consumers = 20%
Taxpayers = 80%
Sources of financing

16. Payments conditional on specific farm practices

17. Potentially environmentally harmful support to farmers decreased in OECD area

18. Agricultural knowledge generation

19. Key lessons – Need for further reforms

20. Countries generally agree on what is needed
2016 OECD meeting of Agriculture Ministers
Numerous objectives shared across countries
Countries also agree that more coherence is needed with other policies
Traditional policies reached their limits
Shift support from quantity to quality and the environment

21. Adopting policies which are :
How could be achieved?
Adopting policies which are :
Coherent with economy-wide objectives and policies
Transparent, with explicit objectives and intended beneficiaries
Targeted to specific outcomes
Tailored - proportionate to the desired outcome
Flexible to reflecting diverse situations and priorities over time and space
Consistent with multilateral rules and obligations
Equitable within and across countries

22. A positive reform agenda for agriculture
Reduce/eliminate wasteful, inefficient or inconsistent agricultural policy measures and move away from “entitlement” based instruments
Make innovation priority: R for D rather than R&D
Foster sustainable resource use
Strengthen resilience through a 3-layer approach to risk management. Policies should not inhibit or “crowd-out” farmer- and market-based risk management; focus on catastrophic risks
Define clearly the non-market goods and services sought when designing payments

23. What is OECD doing? Monitoring and evaluating agricultural policies
Medium term prospects for agricultural policies and markets
Innovation in food and agriculture
Country reviews
Risk management
Improving sustainability in food and agriculture
Resource efficiency in the food chain (waste, energy)
Climate change and water
Biodiversity and ecosystem services
Network on agricultural TFP and environment
Data, indicators and quantitative tools

24. Thank you for listening!
Agriculture policy resources
Policy notes
Digital tools
Evidence base
Brochure
Concise briefs on trade policy issues available online
Data visualisation and other digital tools available
stats.oecd.org
All OECD trade research is published on the iLibrary
Comprehensive overview of OECD work on agriculture policy