Norway’s farm subsidies highest in OECD

Norwegian farmers get a larger proportion of their income from government subsidies than any other country in the OECD, a report showed on Wednesday.

Norway's farm subsidies highest in OECD
Photo: NTB Scanpix

Agricultural subsides made up 60 percent of Norwegian farmers’ income from 2009 to 2011.

The Organisation for Economic Cooperation and Development said Norway needs to do more to cut production support and increase access to markets, newspaper Nationen reports.

Government subsidies for farmers in OECD countries have fallen by half over 40 years, reaching the lowest levels since the mid-1980s, according to the report.

But the fall reflected a rise of food prices rather than changes in subsidy policies, the report said.

The rise of food prices had propped up revenues for the sector, according to an annual report on agricultural policies by the 34-nation OECD.

"In 2011 support to producers across the OECD area amounted to $252 billion or €182 billion," said the report.

This is equivalent to 19 percent of farm gross receipts in the 34-member OECD countries, a slight drop from 20 percent in 2010.

"This is the lowest level observed since OECD began measuring support in the mid-1980s, when the producer support estimate as percentage of gross farm receipts was almost twice as high (37 percent)," said the OECD.

However, the decline was "driven by developments on international markets, rather than by explicit policy changes."

"With higher world prices, policies to support domestic prices generated smaller transfers," it noted.

Global food prices hit a peak in February 2011, according to the Food and Agriculture Organisation's index of prices.

Meanwhile the differences in support levels vary substantially throughout the group, with those in Australia, New Zealand and Chile reaching just 1 to 4 percent.

In Switzerland, Japan and Korea, just over half of gross farm receipts were made up by agricultural support.

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WTO rules US tariffs on Spanish olives breach rules

A US decision to slap steep import duties on Spanish olives over claims they benefited from subsidies constituted a violation of international trade rules, the World Trade Organisation ruled Friday.

WTO rules US tariffs on Spanish olives breach rules
Farmers had just begun harvesting olives in southern Spain when former US President Donald Trump soured the mood with the tariffs' announcement. Photo: Jorge Guerrero/AFP

Former US president Donald Trump’s administration slapped extra tariffs on Spain’s iconic agricultural export in 2018, considering their olives were subsidised and being dumped on the US market at prices below their real value.

The combined rates of the anti-subsidy and anti-dumping duties go as high as 44 percent.

The European Commission, which handles trade policy for the 27 EU states, said the move was unacceptable and turned to the WTO, where a panel of experts was appointed to examine the case.

In Friday’s ruling, the WTO panel agreed with the EU’s argument that the anti-subsidy duties were illegal.

But it did not support its stance that the US anti-dumping duties violated international trade rules.

The panel said it “recommended that the United States bring its measures into conformity with its obligations”.

EU trade commissioner Valdis Dombrovskis hailed the ruling, pointing out that the US duties “severely hit Spanish olive producers.”

Demonstrators take part in a 2019 protest in Madrid, called by the olive sector
Demonstrators take part in a 2019 protest in Madrid called by the olive sector to denounce low prices of olive oil and the 25 percent tariff that Spanish olives and olive oil faced in the United States. (Photo by PIERRE-PHILIPPE MARCOU / AFP)

“We now expect the US to take the appropriate steps to implement the WTO ruling, so that exports of ripe olives from Spain to the US can resume under normal conditions,” he said.

The European Commission charges that Spain’s exports of ripe olives to the United States, which previously raked in €67 million ($75.6 million) annually, have shrunk by nearly 60 percent since the duties were imposed.

The office of the US Trade Representative in Washington did not immediately comment on the ruling.

According to WTO rules, the parties have 60 days to file for an appeal.

If the United States does file an appeal though, it would basically amount to a veto of the ruling.

That is because the WTO Appellate Body — also known as the supreme court of world trade — stopped functioning in late 2019 after Washington blocked the appointment of new judges.