Research Reports
Domestic Agricultural Subsidies in WTO and OECD Countries and Implications for Korean Agriculture
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AuthorSong, Jooho
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Publication Date2009.07.01
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Original
The purpose of this study was to compare the agricultural subsidies in major WTO and OECD member countries and draw implications for Korean agriculture.
Every WTO member country should notify its implementation results of domestic subsidy reduction commitment to the WTO for review. This report scrutinizes the notified domestic subsidy documents of major member countries of the WTO to draw implications for Korean agricultural policy. The US classified direct payments as green box, but the WTO panel judged that cotton direct payment did not conform with the green box criteria in the UR agreement. Many countries have reduced market price support and depend more heavily on decoupled income support. Korea should follow the same trend in agricultural policy reform to overcome market opening. Many countries utilized technical tips that can be adopted in calculating Korea’s domestic subsidy amount in the future.
The OECD has developed the PSE (Producer Support Estimate) as an indicator to measure the amount of support for agriculture in each country. Even though there have been continuous criticisms about the usefulness, PSE has been used as a tool to compare the significance of market distortion between countries. Korea is known to have the almost highest %PSE figure among the OECD members due to high domestic prices. Thus, domestic policy should be transferred to direct payment from market price support and more endeavor is needed to improve marketing efficiency and high tech development.
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