By Organisation for Economic Co-Operation and Development
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Additional info for Agricultural Trade and Poverty: Making Policy Analysis Count
In the case of officially supported export credits, the analysis by the OECD estimates a subsidy element of such programs during the 1994-1998 period for which survey data are available and also notes evidence that supports a treatment in the model that is the same as the treatment of export subsidies - namely, the relatively large share of officially supported export credits provided to countries that are likely to import from competitive markets. Thus, the analysis of this report provides estimates of the impact of an elimination of either of these two export competition policies on world commodity markets.
One common assumption is that producers who receive government support in addition to market returns will not generally view these alternative sources differently, apart from the fact that government support may be based on different criteria than simply quantity of output. This assumption may be questioned if one expects that risk has a very strong effect on producer decision-making and, moreover, that government support tends to incur far less risk than market returns. Figure 1. Approximate country and commodity scope of Aglink Commodity scope Oilseeds Beef and products Countries scope Wheat Coarse Grains Rice Australia Argentina Brazil Canada Chile China Chinese Taipei European Union Hungary India Indonesia Japan Korea Mexico New Zealand Poland Paraguay Russia Singapore Thailand Uruguay USA Others aggregate X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X Pork Poultry & eggs Milk and dairy products X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X Notes: "X" indicates that the market is endogenously determined in the model.
The world to domestic price transmission may be direct in the absence of barriers due to policy intervention or undeveloped infrastructure, but in many cases price transmission is limited, or even completely severed, by import barriers and/or export competition measures. Many OECD Members, for example, choose to use market price support as a primary mechanism for supporting their farmers, in which case trade measures are necessary to increase internal prices to support price levels without regard to lower world prices.