Aid to agriculture increases by 130% in China and by 40% in the US

Global support to agriculture per capita in the period 2005-2010 has increased by 130% in China, by 60% in Brazil and by 40% in the United States, while in the European Union it has stayed in the same level since 2005, according to the indicator "Global Support to Agricultural Production (SGPA)" published by the Movement for a World Agricultural Organization, MOMAGRI.

According to the indicator that measures support to agriculture in the planet's four largest agricultural producers (Brazil, China, United States and European Union) in 2010, the first place in absolute value is for the US with 163,000 million dollars; in second place is China with 154,000 million dollars; in third place is the EU with 101,000 million dollars and Brazil is fourth with 38,000 million dollars.

In terms of the percentage of the production's value, the US takes the first place with aid representing 48% of the total value, followed by the EU and Brazil with 24% and finally China with 20%.

According to the report, it appears that Brazil and the US show similar support policies to promote competitiveness and stimulate domestic demand. This way, growers from those countries benefit from regulation tools such as:

1. For Brazil: direct intervention in the market, storage planning and funding for the development of biofuels (42% of the Brazilian AGPA).

2. For the US: countercyclical aid mechanisms carried out by insurers and a large plan for domestic food aid.

Regarding China, the report states that the government enforces policies of intervention and insurance of the agricultural production, especially in the shape of a minimum guaranteed price (258 US$/t for wheat, 291 US$/t for rice in 2010), direct income support, social support programs and tax cuts.

Contrastingly, "the EU is the only one basing its agricultural policy on aid decoupled from production, accompanied by greening criteria," according to MOMAGRI in their statement.

According to MOMAGRI:

- "Despite claims about the maintenance of the CAP budget, results show that, since 2005, Europe has taken a different direction to that of other large world producers, which are making large investments to ensure food security for their populations."

- "The worrying decrease in aid entails that the EU may fall behind; situation which would only get worse if the project for the reform of the CAP goes ahead."

- "If the EU persists in its plan to reform the CAP, falling behind would lead to very severe consequences for European agriculture and the agri-food industry." MOMAGRI does not call for an increase in the CAP's budget, but for the adoption of price regulation mechanisms and, consequently, of the income.

It is the first time that the institution compares the support to agriculture in the world's largest agricultural producers. To date, MOMAGRI had only published comparisons between the EU and the US.

Source: Fepex