By Organization for Economic Co-operation and Development
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Additional resources for Agricultural Policies in Oecd Countries: Monitoring and Evaluation 2003
The MLAP creates direct incentives to produce by giving payments per tonne and the corresponding price effect is estimated to be equal to the payment. The DPCs and the CCPs are paid on historical rather than current production and they may create some impacts on area allocation through the implicit price of the use of land. The relative price effects of these two payments are estimated to be smaller than those associated with the MLAP, in line with the results in the PEM crop analysis. 4 Two main crop programmes of the 2002 Farm Act give payments that are contingent on market prices and require risk effects to be calculated: the MLAP and CCPs.
In general, the cost of improving the environmental performance of agriculture is often lower when policies in place are consistent with the Polluter Pays Principle (PPP), yet there appears to be scope for greater application of the PPP (Chapter 4). Some countries also use payments based on overall farming income, which tend to be the least production and trade distorting, create less pressure on the environment, and are the most effective measures in transferring income to producers. In 2000-02 these payments represented around 14% of the PSE in Australia and Canada, and 6% in the United States.
Org/agr/policy). 2 EVALUATION OF POLICY DEVELOPMENTS Overall, some progress in reform has occurred,... 3). 3. A graphical representation of key indicators of policy reform Progress towards the long-term objective of policy reform requires that policy goals be achieved with least distortion. This necessitates a combined reduction in the overall level of support and a re-instrumentation of policy measures. This second requirement involves both a shift towards less production distorting policy measures and a reduction in the variation of support levels between commodities.
Agricultural Policies in Oecd Countries: Monitoring and Evaluation 2003 by Organization for Economic Co-operation and Development