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Farm reforms not sufficient: OECD

Our Bureau

MUMBAI, April 30

AGRICULTURAL markets are on the upturn after a prolonged period of record low values for many commodities. Demand, particularly in non-OECD countries, is growing faster than production and global stocks are falling. If global economic growth is sustained in coming years, this will stimulate trade and lift world prices for most agricultural products between now and 2006.

But support and protection to OECD agricultural producers remain high, although a slight decrease occurred in 2000 after a two-year rise. The key conclusion is that reform has been insufficient and remains fragile, said a Paris-datelined news release fro m OECD.

Two new OECD reports, Agricultural Policies in OECD Countries: Monitoring and Evaluation 2001 and the OECD Agricultural Outlook 2001-2006, scheduled to be released on May 4, look at support levels and agricultural policy developments of the past year and evaluate policy and market prospects up to the year 2006 for cereals, oilseeds, meats and dairy products.

Their main message is to urge governments to take advantage of the improved market prospects to design agricultural and other policies to achieve their economic, environmental, and social objectives in ways that minimise distortion to production and trad e, the news release pointed out.

Farm support in the OECD countries continues to have a major impact on agricultural markets as the pace and depth of agricultural policy reform has been mixed. Support is still very high at $327 billion or 1.3 per cent of GDP in the OECD area, for the ye ar 2000; it was 22 per cent in the US and 38 per cent in the European Union.

However, the decrease in support and protection last year reflected world price rise and exchange rate movements rather than major agricultural policy changes. Farmers' response to low prices in some of the major OECD countries has been muted by rising s upport payments which have delayed or slowed needed adjustment, OECD said.