Where Agriculture is Most Subsidized

Out of 26 countries and the EU-28 analyzed by the OECD, agricultural subsidies were highest in the Philippines, followed by Indonesia. The government helped local farmers and consumers out to the tune of 3.1 percent of GDP in the Southeast Asian country. Neighbor Indonesia had the second-highest agricultural subsidies in the survey at 2.9 percent, followed by China at 1.6 percent of GDP.

In the Philippines around 27 percent of farm receipts consisted of subsidies, the highest among the 54 countries in the survey. The subsidies are delivered by high import levies that elevate the price of imported products above world market levels, enabling local producers to ask for higher prices and still remain competitive. Indonesia applies similar mechanisms to raise the domestic price of staples, which in both countries benefit rice growers to a high degree. Both the Philippines and Indonesia recorded negative levels of support for consumers through these policies by making them pay above world market prices.

Overall agricultural subsidies are calculated as the combination of monetary contributions, price guarantees or infrastructure help by the government to farmers as well as price moderation benefiting consumers by lowering prices for them.

Between 2017 and 2019, the OECD counted $708 billion of support for agricultural producers in the 54 countries, countered by $89 billion of implicit taxation of farmers, resulting in a net agricultural producer support of $619 billion. Argentina and India were named by the OECD as countries where government policy resulted in an implicit taxation of farmers, lowering their incomes by suppressing prices opposite the world market.

In India, extensive support programs for consumers are also in place, resulting in net positive agricultural support of 0.6 percent of GDP. In Argentina and Vietnam these programs are small to non-existent, resulting in negative net support for agriculture.