OECD ASSESSMENT ON FARMING (Syllabus: GS Paper 3 – Agriculture)

Context: According to the most recent assessment by the Organisation for Economic Co-operation and Development (OECD), Indian farmers incurred an implicit tax of $169 billion in 2022 through export bans, duties, or permits on commodities such as wheat and rice. 

Key Findings

• India’s negative MPS policy taxation constituted over 80 per cent of all such taxes globally in 2022. Among 54 countries analysed in the report, implicit taxation to farmers was about $200 billion.
• In India's case, different budgetary transfers to farmers in the form of large subsidies for variable input use, such as fertilisers, electricity, and irrigation water, PM-KISAN, did not offset the price-depressing effect of domestic marketing regulations and trade policy measures.
• The international measure of a government’s budgetary and other subsidies to farmers is the Producer Support Estimate (PSE), developed by OECD that uses this for its annual tracking of global agriculture supports.

Organisation for Economic Co-operation and Development (OECD)

• About: It is an international organisation with 38 member countries.
• Founded in: 1961 to stimulate economic progress and world trade.
• Headquarter at: Paris, France.
• Members: The majority of OECD members are high-income economies with a very high Human Development Index (HDI)and are regarded as developed countries. 
• Aim: Fostering economic development and cooperation and fighting poverty through the promotion of economic stability.