Global Food Security and Policy Coherence

Jonathan Brooks OECD Trade and Agriculture

Meeting of National Focal Points for PCD – 7th November 2012

Global Food Security and

Policy Coherence Measuring PCD

OECD Trade & Agriculture 2

Aspects of policy coherence

• The spill-over effects of OECD countries’ policies

– Including food and agricultural policies

– Other policies affecting food security indirectly (e.g. consumer waste, over-consumption, innovation)

• Knowledge sharing

– Innovation, effectiveness of different policies

– More about processes than incidence and impact


What can we measure?

1. Identify coherent and incoherent policies

2. Quantify the incidence of policies, or policy effort – using regularly available data (e.g. OECD’s calculations of farm support)

3. Can quantify their impacts on developing countries using ex post (econometric) analysis, or ex ante analysis (simulation models)

4. Can compute indicators of intermediate or final outcomes

Can do 1, 2 and 4 on a regular basis but 3 tends to be more ad hoc


Identification of spill-over policies

• Market distorting policies

– Market price support, food subsidies

– Associated trade policies: import protection, export subsidies and taxes

– Production and trade distorting subsidies

• Other policies that affect supply and demand on world food markets

– Agricultural productivity (R&D, innovation)

– Land and water use

– Biofuel policies

– Producer & consumer waste

– Over-consumption, meat demand


Measuring market distorting

policies

• OECD’s Producer Support Estimate (PSE) methodology • Categorises and quantifies support to farmers, and to

the sector more generally, according to the tendency of that support to distort markets

• Applied to OECD & larger emerging economies

• Other IOs also seek to measure market distorting policies for developing countries • World Bank’s Agricultural Distortions project; FAO’s

MAFAP; APO, IADB; IICA.


What does OECD support measure?

2008-10 average, USD billion

Support to farmers (PSE) 246

Market price support 109

Budgetary payments 137

General services (GSSE) 91

Transfers to consumers (CSE) 37

Total support (TSE) 374

Support includes market price support as well

as budgetary transfers


How support to farmers has evolved…

0%

5%

10%

15%

20%

25%

30%

35%

40%

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Support based on commodity output +

payments based on input used

Other payments

Composition of PSE, 1986-2010


Other policies that affect world markets

• OECD-FAO Agricultural Outlook – 10 years

• Long-term scenario analysis (AGMIP) – out to 2050 and beyond

Can gauge the effect of supply and demand shifters

• Can also measure inputs and policy effort

– E.g. agricultural productivity – spending on R&D

– Land and water – pricing for sustainable use


POLICY IMPACTS MARKET LINKAGES

LEVEL 1

LEVEL 2

WORLD MARKET IMPACTS MULTILATERAL TRADE POLICY REFORM

EXPORT AND IMPORT

PRICE IMPACTS

HOUSEHOLD LEVEL

IMPACTS

NON–MARKET POLICIES

LOCAL DOMESTIC

MARKET IMPACTS

DOMESTIC MARKET POLICIES

NATIONAL TRADE POLICIES

LEVEL 3

LEVEL 4


Measuring impacts

Difficult to capture all the causal links

– Policy changes

– Effects on world markets

– Cross border price transmission

– Within country effects

Modelling efforts

– Global and partial equilibrium models (GTAP, DEVEPM)

– Case studies of impacts (e.g. NTMs, import surges)

– Estimates of price transmission


Other indicators

• Inputs

– Public expenditures (PSEs, ASTI etc.)

– Regulatory indices

• Outcomes

– Various measures of and proxies for food security


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Contact

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OECD Trade and Agriculture

Global Food Security and Policy Coherence

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