The Nominal Rate of Protection (NRP) measures the extent to which a set of agricultural policies affect the market price of a commodity relative to world prices. It is computed as the price difference, expressed as a percentage, between the farm gate price received by producers and an undistorted reference price at the farm gate level.
The NRP receives more attention than other support measures partly because measures captured by the NRP influence the behavior and the welfare of both producers and consumers. A tariff on food, for instance, causes producers to expand output and consumers to lower their consumption. The combined impact on imports is greater than for a subsidy that provides the same level of support to farmers. Little wonder that a country’s NRP rates are of great interest to trading partners. Their domestic impacts are of intense political interest. Do the benefits of higher food prices to producers outweigh the higher costs of food to consumers—and particularly poor consumers?
This NRP alone is not aimed to provide a complete measure of the impacts of agricultural policies, in contrast with the Nominal Rate of Assistance (NRA).
For an introduction to the database, please see Laborde, D., Lallemant, T., Majeed, F. Mamun, A., Martin, W., and Tokgoz, S. (2023). Introducing the Updated AgIncentives Database. AgIncentives Working Paper, IFPRI, Washington DC.
DETAILS OF NRP MEASURES
The calculation of the NRP requires estimates of a reference price measure that would be observed in the absence of intervention. This is adjusted for transport costs so that it can be compared with actual prices at the farm gate. These price series are of considerable analytical interest when, for instance, considering the relative volatility of prices with and without intervention. For this reason, they are made available along with the estimated NRP rates. For more information regarding the computation of the reference price at farm gate and the market price difference (MPD), see OECD PSE Manual, Section 4.5
The Consortium provides average NRPs for different regional and sectoral aggregates that are useful for many purposes, including making estimates of the total support to agriculture in these contexts. Caution should, however, be exercised in considering changes in these series over time. Product and country coverage of an aggregate may vary over time due to changes in data availability. The number of products and/or countries included in each aggregate are indicated in individual mouseover points in the visualizations, as well as in the file download.
AgIncentives Consortium (2023). https://www.agincentives.org/nominal-rate-of-protection (Accessed on: <date>) based on data from OECD, FAO, IDB and World Bank compiled by the International Food Policy Research Institute (IFPRI)