Download Agricultural Subsidies Infographic

What are
Agricultural Subsidies?
Agricultural Subsidies are a proxy measure to assess the
environmental impacts of policies that tend to encourage the
inefficient use of resources that can lead to pollution.
How do we know?
Nominal Rate of Assistance
The Nominal Rate of Assistance, or NRA, is defined as
the price of an agricultural product in the domestic
market (plus any direct output subsidy) less its global
price expressed as a percentage of the global price
(adjusting for transport costs and quality differences).
$
Global Price (price at border)
$
Domestic Price (price with assistance)
NRA
HOW TO SCORE WHEN DATA ARE MISSING?
The World Bank only provides NRA data for around 82 countries. For all others, we
use a set of rules to determine how to estimate a score for countries. Countries that
have a negative NRA (i.e., taxation) receive the top score of 100. Countries with low
to middle income (GNI per capita < $4,085). also receive a score of 100, as poor
countries are less likely to subsidize their agriculture sectors (see figure below). For
high income countries (GNI per capita > $12,616) with agriculture GDP > 5% of the
total GDP, a point value is based on a regional GDP model. Countries that have
negligible agriculture sectors (agriculture GDP < 5%) do not receive a score at all.
100
Est.
100
score
score
High Income
(GNI per capita >$12,616)
No
score
Low - Middle Income
(GNI per capita <$4,085)
score
Agriculture GDP < 5%
Negative Subsidies /
Tax
Income Subsidy Gap
Due to monetary limitations, low-income
countries have traditionally not provided
agriculture subsidies. It is primarily
high-income countries that can afford to
subsidize agricultural production.
50% Assistance
Subsidy gap between high-income
countries & developing countries
No Assistance
High-Income Countries
World Market
50% Tax
Developing Countries
1955
2000
Why does it matter?
Increased Environmental Pollution
Agricultural subsidies have been found to lead to more intensive agriculture,
inefficient use of resources such as water and agricultural inputs, and can lead
to increased environmental pollution through the greater use of pesticides,
insecticides, and fertilizers.
Increased Use of Water
2-3 times
more water
than needed
70%
of global freshwater
use is for agriculture.
Water used
Water needed
to grow plant
Increased Use of Pesticides
99.9% of sprayed
insecticides migrate to
nearby streams, rivers, and lakes
through rainfall runoff
Over-Production
The over-production of government-favored crops distorts global
commodity markets. Not only does this affect the global economy,
but also food security and poverty.
62 million metric tons
CROP
SURPLUS
Free water and electricity in India led to
massive surpluses of 62 million metric tons.
This was 60% of the nation’s harvest in
2012 and the third largest grain harvest
in the world.
1.2 billion pounds of
pesticides annually
The United States uses 1.2 billion pounds
of pesticides a year, of which only 0.01%
reaches the intended target. The other
99.99% of pesticides sprayed
contaminates the food, air, and water.
government
$$$
References
• “Agriculture and Rural Development”, The World Bank: http://web.worldbank.org
• “Communities in Peril: Global Report on Health Impacts of Pesticide Use in Agriculture.”Pesticide
Action Network International: http://www.pan-international.org/panint/files/PAN-Global-Report.pdf
• G.T. Miller. “Chapter 9.” Sustaining the Earth. 6th ed. Pacific Grove, California: Thompson Learning,
Inc. (2004): 211–216
• “World Development Report 2008”, The World Bank: http://go.worldbank.org/2DNNMCBGI0