Review and Evaluation of Agricultural Policies in Years 2015-2017

Abstract

This journal article describes main results of the OECD Annual Report published in 2018, titled “Review and evaluation of agricultural policy in 2017” for 51 selected countries in the world, including Vietnam. The report is closely prepared by MARD and OECD experts. The journal article emphasizes more on Vietnam by updating and adjusting data, information and policies in 2017 and 2018. The description presents the changing trend of agricultural policies applied in the world, considering whether this trend is in the direction of achieving sustainable productivity growth, environmental protection, and adaptation to climate change.

On average in the last 20 years, trend of world policies has been better but far to catch above purposes. The development of international trade has made the commodity movement more freely and price gaps narrowed between countries and regions. This trend made agricultural markets developed more toward reflecting the scarcity of good and services.

Average level of total agricultural supports has been reducing. Consequently, the world price indices and the total support have been converted between countries and commodities. However, the total agricultural support reduction is mainly in developed countries like OECD countries. Emerging and developing countries have increased their agricultural supports. Relative to GDP, the level of the total agriculture support in Vietnam has been reducing.

Inside the total agricultural support, producer supports accounted 78% while general service support accounted only for 14%. Inside the producer support, market price support accounted for more than 50% in many countries. Payments based on outputs and inputs also accounted more than 50% in many countries. In Vietnam, the producer support is very small, negative level in 2015 and 2016 and became positive in 2017 and 2018. The agricultural producer support in 2017 is about 900 million USD. In the overall service support, many countries mainly invest in infrastructure construction, for example in Japan and Vietnam over 70%, while investments in other items are too small, for example that in Vietnam is only about 16%.

In conclusion, OECD suggests that market price support should be reduced and finally eliminated. Similarly, output and input payments should be reduced and eliminated. Future policies should focus on general support service that helps producers to achieve sustainable productivity growth in the context of a changing and uncertain climate. OECD especially emphasizes on appropriate investments in research, together with efforts to ensure that the outputs of this research reach farmers. OECD also emphasizes on research that help producers to better manage risks including business risk, weather risk, and climate changes. Agricultural production and climate changes are strongly interacted. Future research should be the better co-operation between public and private sectors with the leading role of public sector. The future research should be co-operated more strongly between countries and regions because of the differences in histories, cultures, geology and climate.