Public subsidies for agricultural production and agrochemical inputs exacerbate environmental pressures by encouraging intense chemical use, the expansion of agriculture to sensitive areas, and overexploitation of resources. OECD (2004). The Agricultural Subsidies indicator measures subsidies as a proportion of agricultural value. For countries where this data is available, we use the Nominal Rate of Assistance (NRA), defined as the price of a product in the domestic market, less its price at a country’s border, expressed as a percentage of the border price, and adjusted for transport costs and quality differences (WDR 2008). For those countries where NRA data is unavailable we defer to the proximity-to-target scores provided in the Pilot 2006 EPI. Direct comparisons remain possible between the two different measures of subsidy levels due to the proximity-to-target mechanism employed. The calculations have not been adjusted to exclude “green box” subsidies that have positive environmental impacts. There are few countries where such subsidies are a very significant share of the total. This methodology makes use of the best data available, and we hope to include a more accurate measure in future editions of the EPI as improved data sources arise. The EPI target is set at no subsidy.
This is very interesting with respect to fair trade, no wonder developing countries farmer’s struggle, and then there is international pressure put on African countries not to subsidize farming!?