NOMINAL RATE OF ASSISTANCE (NRA)

We define s, the element of S, the set of policy components composing the farm support: {A1. Market Price Support; A2. Payments based on output; B. Payments based on input use; C. Payments based on current A/An/R/I, production required; D. Payments based on non-current A/An/R/I, production required; E. Payments based on non-current A/An/R/I, production not required; F. Payments based on non-commodity criteria; G. Miscellaneous payments}

We also define the subset P, for payments, that includes: {A2, B, C, D, E, F, G} and O the subset of payments not linked to current production level: {D, E, F, G}

Detailed NRA measures are presented in the dataset for different forms of policy intervention and for commodities to which they provide support. These can be aggregated in different ways, conditional on the purposes for which the results are needed.

The NRA for a country r, year t, and for all products (“Total”) is defined as:

where X denotes the associated transfer from consumers or taxpayers to producers and the denominator shows the value of production valued at farmgate reference prices for product i, in country r, and year t.

Conceptually, the NRA can also usefully be aggregated along the product dimension This provides a measure of total support to producers of a particular product. For product i, the NRA in region r and year t is defined as:

The NRA may also be aggregated by type of intervention, such as payments linked to output, inputs, and other payments.

In the table below we summarize various indicators following OECD’s classification of payments as described in the Producer Support Estimates (PSE) database. We complement the OECD’s PSE database with data from the Inter-American Development Bank’s Agrimonitor program and the FAO MAFAP’s monitoring effort. As in this table, some support can be allocated to individual commodities; some (such as subsidies for veterinary medicines) can only be allocated to broad commodity groups such as livestock; and some (such as tax concessions for farmers) can only be allocated to agriculture as a whole.  However, some payments cannot be allocated to any specific commodity, rather to crops or livestock sector or agricultural as a whole.

Table 1: General classification of payment categories and NRA indicators