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Last Updated: Wednesday, 21 June 2006, 13:59 GMT 14:59 UK
OECD members pay $283bn farm aid
Agricultural subsidies are a key stumbling block in world trade talks
Developed nations spent $283bn (154bn) on agricultural support in 2005, the Organisation for Economic Cooperation and Development (OECD) has said.

The total was responsible for 29% of farm earnings, the OECD said, and 59% of the support was directed at boosting the prices of agricultural products.

It said subsidies and tariffs were distorting production and trade.

The OECD believes eliminating such protectionism will provide a big boost to the world economy.

Price gap falling

In a study of agricultural policies among its 30 member countries the OECD found wide variations in the level of government support.

In Australia it represented just 5% of farm receipts, and 16% in the US.

Across the European Union the figure was 32%, down from 33% in 2004.

The country with the largest proportion of government support for farmers was Switzerland, where it was responsible for 68% of farm income.

However, the OECD noted that support for farmers as a percentage of their incomes had fallen since 1988.

It added that, over the same period, OECD members had been cutting their levels of price support for farm products.

In 1988, the average OECD domestic price for farmed goods was 57% higher than the world price, a gap that had fallen to just 27% by 2005.

But these reductions had been replaced by an increase in agricultural payments based on the area or number of animals being farmed.

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