As Ministers begin to piece together a new agricultural policy for the UK, Abi Kay uses an AHDB report – Agricultural policy models in different parts of the world – to sketch out some possible future options.
The 2014 Farm Bill moved the US from direct payments towards an insurance-based system.
Initially the focus was upon crop yield insurance, but new models were quickly developed which allowed American farmers to insure revenue.
The Agricultural Risk Coverage scheme uses average revenue for the previous five years as an insurance basis, guaranteeing 85 per cent of the amount for the following year.
In 2015, ‘Whole-Farm Revenue Protection’ was made available which allowed whole farms as opposed to single commodities to be insured.
Canada has reduced agricultural support significantly since the 1980s, but does still have market price support for dairy, poultry and eggs – making prices 7 per cent higher in 2013-15 than those on world markets.
Canada also provides four support programmes though its ‘Going Forward 2’ (GF2) policy.
Support to producers in Australia has been continuously reduced and now amounts to just 0.1% of GDP. In 2014, the Australian agricultural budget was $830 million.
Very low tariffs on imports mean the Australian farming industry is now strongly market-oriented with domestic prices equivalent to world prices.
Australian agricultural policy is mainly focused on preventing severe income losses for farmers through disaster assistance and tax concessions.
New Zealand is one of the few countries in the world to abandon price support systems for its agricultural sector and embark on a free trade policy.
The programme has improved productivity in the agricultural sector and encouraged growth in the rest of the economy.
Although there were short-term adjustment problems, New Zealand has shown farmers can adjust to lower subsidies and maintain incomes at reasonable levels.
Many activities such as market research and development, quality assurance, and plant and animal health protection are funded by producer levies.