The world’s richest economies’ support for agriculture in 2010 was the lowest level in nearly three decades, according to new figures released by the Paris-based OECD (Organisation for Economic Cooperation and Development).

The drop in farm subsidies in OECD countries from 22 per cent in 2009 to 18 percent in 2010 reflects a long-term trend, according to the OECD’s annual Agricultural Policy Monitoring and Evaluation 2011 report (September 21), a trend which may further complicate trade liberalization talks.

The drop was attributed to the high price of commodities which reduced the need for price subsidies.  At the same time, the report noted that China's subsidies to farmers soared six-fold between 2008 and 2010, making it the global leader in agriculture supports. “Direct payments to grain farmers in China have been consistently increasing since their introduction in 2004,” the OECD said.

OECD Director for Trade and Agriculture Ken Ash noted that “With tighter government budgets and farmers getting top prices for their crops, governments should begin to shift from payments that further support farm incomes and move to policies that have long-term benefits for the global food economy. The time is ripe for reforming farm support,” he added.

The OECD has long argued for reduced agricultural subsidies which are a major part of the so-called Doha free trade negotiations at the Geneva-based WTO (World Trade Organisation). Emerging economies have also been pushing the US and the EU to lower agricultural subsidies on the grounds that they were too high and distorted global market prices.

New Zealand had the lowest level of support followed by Australia and Chile while the US, Israel, Mexico and Canada are all now below the OECD average. Although EU nations have reduced their level of support they remain above the OECD average.

Brazil, South Africa and Ukraine generally support agriculture at levels well below the OECD average and Russian farm supports are now above it.