Farm support

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Transition economies are busy reforming their agricultural systems to join the EU, but in one area – agricultural support – most of them have already cut levels to below those of their EU neighbours, a new OECD study has found. And although Producer Support Estimates (PSEs) increased in all seven non-OECD transition economies in 2001, only Slovenia’s support remained above the OECD and EU levels.
The increases in 2001 were marginal in most cases and PSE, which measures support as a percentage of total farm receipts, remains well below pre-reform levels, when it was significantly higher than the OECD average. This suggests that the transition was associated with a notable overall reduction of policy distortions in the agricultural sector, Agricultural Policies in Transition Economies: Trends in Policies and Support notes. Now Bulgaria, Estonia, Latvia, Lithuania, Romania, Slovenia and Russia need to push ahead in areas such as land reform, market infrastructure and improved commercial production to be ready to meet future opportunities and challenges, for all of which they will need to attract investment, the report says.One area where most transition countries remain above the OECD average is in the size of their agricultural populations. In Romania, for instance, more than 40% of the working population is in farming, compared with an OECD average of about 8%.OECD (2002), Agricultural Policies in Transition Economies: Trends in Policies and Support, Paris. © OECD Observer No. 234, October 2002

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