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SWITZERLAND : ESTIMATES OF SUPPORT TO AGRICULTURE

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SWITZERLAND : ESTIMATES OF SUPPORT TO AGRICULTURESWIT

    NORWAY: ESTIMATES OF SUPPORT TO AGRICULTURE

    Contact person: Hsin Huang

    Email: hsin.huang@oecd.org

    Tel : 33 (01) 45 24 95 28

    Fax : 33 (0)1 44 30 61 01

    DEFINITIONS AND SOURCES

    Table 1. Agricultural Support Estimates / Total Transfers contains country Total Support

    Estimate (TSE) and derived indicators, which cover all agricultural production, i.e. all agricultural commodities produced in the country. Definitions of basic data sets refer to the specific programmes applied in the country. For the Producer Support Estimate (PSE) and Consumer Support Estimate (CSE), each policy measure is classified according to implementation criteria, which include: the transfer basis of

    support (output, input, area/animal numbers/receipts/income, and non-commodity criteria); whether support is based on current or non-current basis; whether production is required or not to receive payment.

    Each policy measure is also assigned several “labels” indicating additional implementation criteria. "MPS commodities", which vary across countries, are those for which the market price support is explicitly calculated in Tables 4.1 4.11.

    Table 2. Breakdown of PSE by Commodity and Other Transfers provides a breakdown of the

    total PSE into four categories reflecting the flexibility given to farmers regarding which commodity to produce within the various policy measures. These categories are: Single Commodity Transfers (SCT); Group Commodity Transfers (GCT); All Commodity Transfers (ACT); and Other Transfers to Producers (OTP). All data sets in Table 2 come from Tables 1 and 3.1 3.11 where definitions are included.

    Tables 3.1 3.10 Producer Single Commodity Transfers contain producer SCT by commodity,

    which are calculated for Norway for the following commodities: wheat, barley, oats, milk, beef and veal, pig meat, sheep meat, wool, poultry meat, eggs (Tables 3.1-3.10) provided that the value of production of that commodity exceeds 1% of the total value of production. In addition, SCT for “other commodities” is

    also calculated (Table 3.11), which covers transfers to single commodities other than MPS commodities.

    All data sets in the calculation of producer SCT by commodity come from Tables 1 and 4.1-4.10 where definitions are included.

    Tables 4.1 4.11 contain Market Price Support (MPS) and Consumer Single Commodity

    Transfers (consumer SCT) by commodity, calculated for the same set of commodities as Tables 3.1 to

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    3.11. Definitions are provided only for basic data sets from which all the other data sets in this table are derived.

    Definitions of the indicators, criteria for classification of policy transfers included in support estimation, and methods of calculation are contained in the PSE Manual (OECD’s Producer Support

    Estimate and Related indicators of Agricultural Support: Concepts, Calculations, Interpretation and Use)

    [http://www.oecd.org/tad/support/psecse].

    TABLE 1: Norway: Total Support Estimate

    Definitions:

    I. Total value of production (at farm gate): Total agricultural production valued at farm gate prices,

    i.e. value (at farm gate) of all agricultural commodities produced in the country [1].

    I.1. Of which share of MPS commodities (%): Share of commodities for which MPS is explicitly

    calculated (in Tables 4.1-4.10) in the total value of agricultural production.

    II. Total value of consumption (at farm gate): Consumption of all commodities domestically

    produced valued at farm gate prices, and estimated by increasing the value of consumption (at farm gate) of the MPS commodities according to their share in the total value of agricultural production [(II.1) / (I.1) x100].

    II.1. Of which MPS commodities: Sum of the value of consumption (at farm gate prices) of the MPS commodities as indicated in Tables 4.1-4.10.

    III.1 Producer Support Estimate (PSE): Associated with total agricultural production, i.e. for all

    commodities domestically produced [Sum of A to G; when negative, the amounts represent an implicit or explicit tax on producers].

    A. Support based on commodity output

    A.1. Market Price Support: On quantities domestically produced (excluding for on-farm feed use -- Excess Feed Cost) of all agricultural commodities, estimated by increasing the MPS for the MPS commodities according to their share in the total value of agricultural production [(ΣMPS for MPS

    commodities listed in the rows bellow) / (I.1) x 100].

    A.2. Payments based on output

    Regional deficiency payment for cereals [part of B.1150.73.05]: A regionally differentiated per-

    tonne payment for grains in less-favoured areas provided under the grain and feed-stuff market regulation, until 1991. Allocated to cereals based on the value of production.

    Labels: without L, with F, without C

     On-farm storage payment for grains [part of B.1150.73.05]: Payment to producers under the

    grain and feed-stuff market regulation. In 1995, the regulation was replaced by the grain and feed-stuff market system described below [B.1150.76.01].

    Labels: without L, with F, without C

Transport payment for grains [part of B.1150.73.05]: Payments to producers, under the grain

    and feed-stuff market regulation, which also includes: a price reducing payment and an on-farm

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    storage payment for grains, a payment to stimulate on-farm consumption of feed grains, a transport subsidy for feed grains, and a regional price support payment. In 1995, the regulation was replaced by the grain and feed-stuff market system described below [B.1150.76.01]. Allocated to cereals based on the value of production.

    Labels: without L, with F, without C

Payment for cash crops [B.1150.74.22]: Payment to producers based on the standard labour

    requirement in crop production and granted from 1982 to 1992. The payment increased up to a labour requirement of one man-year and declined thereafter (e.g. in southern Norway a barley farm with 4 hectares received the same payment as a farm with 67 hectares, while a 35-hectare farm got a larger payment). No payment was made to farms with a standard labour requirement of more than 2 man-years. Payments were higher in the northern part of the country and differed by location. Allocated to cereals based on the value of production

    Labels: without L; with F; without C

    Base deficiency payment for meat [B.1150.73.07]: Payment per tonne to producers of pork

    (until 1991), beef and sheep meat (until 1994). Until the early 1990s, part of the payment was used to stimulate on-farm consumption of feed grain, and it was paid per tonne of feed grains milled and used on the farm.

    Labels: without L, with F, without C

Regional deficiency payment for meat [B.1150.73.06]: Regionally differentiated payment per

    tonne to producers of meat, until 1994. Labels: without L, with F, without C

Extra regional payment for meat production in Northern Norway [B.1150.73.09]: Payment per

    tonne to producers of meat, until 1987, then folded into the regional deficiency payment for meat.

    Labels: without L, with F, without C

Deficiency payment for meat [B.1150.73.15]: Payment to farmers (via the meat industry) per

    tonne of meat produced, since 1995, including a base deficiency payment, a regional deficiency payment and an extra regional payment for meat in northern Norway.

    Labels: without L, with F, without C

Payment to high quality eggs [B.1150.73.07]: Payment to producers per kg of high quality eggs,

    provided until 1987.

    Labels: without L, with F, without C

Transport payment for meat [B1150.74.18]: Payment to farmers per kg of meat (except poultry)

    delivered to the slaughterhouse, until 1993.

    Labels: without L, with F, without C

Transport payment for eggs [B.1150.74.16]: Payment to farmers (via the marketing co-

    operatives) per kg of eggs delivered to the packing plant, until 1993.

    Labels: without L, with F, without C

Transport payment for meat and eggs [B1150.73.18]: Payment to producers of meats and eggs

    delivered to the packing plant or slaughterhouse. Combines, as from 1994, the transport

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subsidies for eggs [previously 74.16] and for meats [previously 74.18]. Labels: without L, with

    F, without C

    Deficiency payment for wool [B.1150.73.11]: Payment per tonne to producers of wool, since 1991.

    Labels: without L, with F, without C

District and quality subsidy to horticulture products [B.1150.73.17]:. Regional differentiated

    price subsidy for fruit, berries, vegetables and potatoes of a certain quality. From 1988 onwards.

    Radioactivity [B.1150.70.15/74.19]: Payments to counter radioactivity pollution due to Chernobyl disaster in 1986.

    Labels: without L, with F, without C

Price support payment for milk and milk products [B.1150.73.13]: Payment to dairy farmers,

    including a base payment and a regional payment per litre of milk for a limited output (due to

    the milk quota system).

    Labels: with L, with F, without C

    Structural payment to milk producers [B.1150.74.11]: Payment based on the volume of milk deliveries and granted up to 30 000 litres per farm (15 000 for goat milk). Prior to 1993 it was

    included in price support payment for milk and milk products. From 2003 onwards, the basis

    for payment changed to one determined by animals numbers. Labels: with L, with F, without C

    Subsidy for regional dairy plants: Payment per litre of milk (paid via the dairy plants) to farmers who deliver milk to regional district dairies instead of local dairies, to encourage the

    restructuring of dairy processing. Applied from 1982 to 1991. Labels: with L, with F, without C

    Contract production scheme for eggs: Payment per kg of eggs of A-class quality, granted from 1983 to 1996 to egg producers that deliver to an authorised wholesaler under a supply management contract.

    Labels: with L, with F, without C

    Regional Deficiency payment for eggs [B.1150.73.16]: Payment per kg of eggs, granted from 1999 to egg producers in the Western and Northern part of Norway. Labels: with L, with F, without C

B. Payments based on input use

    B.1. Payments based on variable input use

    Fuel tax concession: value of the fuel tax concession to farmers.

    Labels: without L; Var; without C; AC.

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Support for meadowseed production and storage [B.1150.77.12]: Payment for the production

    and storage of meadowseed to reduce the price of seed to farmers. Until 1994, support for meadowseed production is in a separate budget line [B.1150.74.12].

    Labels: without L; F; without C; SC.

Feed price reducing grant: Payment to producers under the grain and feed-stuff market

    regulation, which was replaced by the grain and feed-stuff market system [B.1150.76.01] in 1995, to reduce the price of feed grain.

    Labels: without L; Var; without C; GC.

    Transport payment for feed-stuff: Payment to producers under the grain and feed-stuff market regulation, which was replaced by the grain and feed-stuff market system [B.1150.76.01] in 1995, to reduce the transport cost of feed.

    Labels: without L; F; without C; GC.

Payment for feed grain use on the farm: Payment to producers under grain and feed-stuff

    market regulation, which was replaced by the grain and feed-stuff market system [B.1150.76.01] in 1995, to encourage the use of own-grown feed grain on the farm.

    Labels: without L; Var; without C; GC.

    Transport payment for inputs: Payment to retailers per tonne of transported fertilisers, lime, silage liquid and carbondioxid (for greenhouses) to reduce the price paid by farmers. Granted until 1990 (after 1986 only for the transport of lime in Northern Norway). Labels: without L; F; without C; GC.

    Transport payment for feed grain: Payments for the transport of feed grain from the silos to the processing plants and for the transport of feed compounds from the processors to the farmers. Granted under the grain and feed-stuff market system, which in 1995 replaced the grain and feed-stuff market regulation [B.1150.73.05].

    Labels: without L; F; without C; GC.

Other Welfare Schemes [B.1150.78.15]: Payments to temporary recruitment in agriculture and

    for Agricultural Health. Agricultural Health is a foundation which works on HSE, Health, Security and Environment issues.

    Labels: without L; F; with C; AC.

B.2. Payments based on fixed capital formation

    Interest rate concessions: Farmers could apply for investment loans at zero interest rate up to 2002. The subsidy element in this program is calculated as the difference between the zero interest rate charged to farmers by the State Bank of Agriculture and the market interest rate multiplied by the volume of outstanding loans.

    Labels: without L; Var; without C; AC.

    Interest rate concessions: From 2003, farmers can apply for interest rate support within the Agricultural Development Fund. The Budsjettnemnda for jordbruket (Budget Comittee for

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    Agriculture) reports the actual amount that is paid every year in Totalkalkylen (Agricultural Statistics) (Appendix 2.1). [B.1150.50.11].

    Labels: without L; F; without C; AC.

Compensation for animal losses [part of B.1150.50.13]: Payment under the small animal fund

    to compensate for losses of animals during the pasturing season in the mountains.

    Labels: without L; F; without C; GC.

Compensation for losses due to predators [B.1427.73]: Payment administered by the

    Environment Ministry to compensate for farm animals killed by preserved species of predators. Labels: without L; F; without C; GC.

Mountain dairy farming [B.1150.74.18]: The aim of the grant is to encourage mountain dairy

    farming and thereby ensure the cultural landscape of mountain dairy farming areas. The payment is connected to summer dairy operations and is given as a fixed amount per "mountain farm". Prior to 2002, in budget item 1150.74.17.

    Labels: without L; F; without C; GC.

Agricultural Development Fund [B.1150.50.11]: This fund includes different measures such as,

    planting in older fruit tree fields, investment in traditional farming, investment in ditching, technical environmental investments, support to energy savings, extraordinary cultural landscape programmes, development programme for goat farming, orgnanized grazing, landing strips for goose, mountain farming, interest rate support and support to World Heritage Sites. Since 1997, the extended support for landscape maintenance and development (previously B.1150.77.08, see below) is also part of the Fund. The expenditures recorded here are net of interest subsidies and loan concessions (which are classified as payments based on fixed inputs) and of landscape payments (classified below), but include payments to farmers.

    Labels: without L; F; without C; AC.

B.3. Payments based on on-farm services

    Insemination and veterinary services [B.1150.77.11]: Public expenditures on insemination, the

    travel costs of veterinarians and general administrative support for veterinary services.

    Labels: without L; F; without C; GC.

    Pest and disease control [B.1132]: Public expenditures for research, on-farm advice, excursions, lectures and meetings related to pest and disease control. From 1994 pest and disease control expenditures are included in support for research stations, which is classified under IV.I -- Research and development.

    Labels: without L; F; with C; AC.

C. Payments based on current area planted/animal numbers/receipts/income production required

    Acreage and cultural landscape scheme potato: Acreage payment for potato production

    Labels: without L; F; without C; Ar; SC

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    the vacation replacement limit has been exhausted. Applies to livestock producers and payment is on a per animal basis, with a cap of 51500 NKr.

    Labels: without L; F; without C; An; GC.

Assistance in case of illness [B.1150.78.12]: Payment based on labour replacement costs in the

    case of illness of the farmer. Split out of the vacation and replacement scheme (see above) in 1996 and supplements that scheme. All commodities are eligible, payment is on a per hectare basis.

    Labels: without L; F; without C; Ar; GC.

Natural disaster payments [B.1150.50.02, now 1148.71]: Payments to compensate for crop

    losses, the restoration of damaged grassland, and the purchase of feed. Compensation for crop losses, which is usually the largest component, is granted if specific crop yields fall short of 70 per cent of the 5-year average. The payments account for the difference between farm sales and 70 per cent of the revenue that would have been obtained on the planted area with normal yields. Labels: without L; F; without C; Ar; AC

Support to organic farming [part of B.1150.74.20]: Payment per hectare or per animal head to

    support conversion to organic farming. Granted since 1990, with specific rates for grains, fruits and vegetables and coarse fodder. [Support for inspection, research, advice, market promotion, organisation and information related to organic farming, included in the same budget line, is classified under IV.I -- Research and development.]

    Labels: without L; F; with C; Ar/An; AC

Changed soil conservation [B.1150.74.18]: The subsidy is given farmers who undertake certain

    cultivation practices that reduce the risk of soil erosion. The grant is given on a per hectare basis. From 2005 a part of the Regional Environmental Programs.

    Labels: without L; F; with C; Ar; AC

Farming in steep area [B.1150.74.18]: The subsidy is given to compensate for the disadvantage

    of farming in steep areas. The grant is paid on a per hectare basis on the land that is greater than 1:5 but at least 50% of the farm must be equal to or steeper than 1:5. Prior to 2002, in budget item 1150.74.17.

    Labels: without L; F; without C; Ar; AC

    Young farmers [B.1150.74.17]: The subsidy is given to strengthen the income of young farmers, especially women. The grant is given as a fixed amount per farm. Young farmers are defined as those under 35 years of age. It was introduced in 1999 but only lasted for three years (i.e. until 2001).

    Labels: without L; F; without C; In; AC

    Income Tax Deduction: Tax deduction introduced in 2000 which allows farmers with a positive income to deduct an amount from their total income, providing a maximum tax saving of NOK 39 800 per farmer.

    Labels: without L; F; without C; Ar; AC

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Support for grazing animals [B.1150.74.16]: From 2007 a new payment was introduced for

    grazing animals in both home fields and outlying fields. The goal of the scheme is to better maintain the landscape values and the biodiversity that depend on grazing animals and open habitats. To qualify for this payment the animals need to be grazing for 16 weeks (12 weeks in the mountain areas and in Northern Norway) as a total for the two schemes. The requirement to qualify for the extensive grazing scheme is 8 weeks of grazing in outlaying fields. The payments in the new scheme is differentiated by small animals (sheep, goat etc) and larger animals (cows, bulls, deer horses etc), and by regions.

    Labels: without L; F; without C; An; GC

Regional environmental programmes [B.1150.74.19]: From 2005 there was a change in the

    Norwegian agri-environmental policy towards a more local and regional administration of environmental instruments. The special environmental measures in agriculture and forest measures in relation to the Agricultural Development Fund are delegated down to local authorities. A national environmental program is established. The national environmental program lays out national goals and gives guidance and framework for regional environmental programs. In addition it contains some broad measures, such as the cultural landscape scheme, payments for animals on outlaying fields and payment for organic agriculture. Regional environmental programs were established for all counties (18) in 2005. The programs are based on regional priorities built on analyses of environmental challenges in the county. Each county has established their own support measures targeted and tailored to meet the specific environmental challenges in the region. The programs will aim at two main objectives; to safeguard the cultural landscape (biodiversity, cultural heritage, public excess etc.), and to reduce pollution.

    Labels: without L; F; with C; Ar; GC

D. Payments based on non-current area planted/animal numbers/receipts/income production required

    Cultural Landscape Support [B.1150.74.17]: A standard annual payment of NOK 2 000 per

    hectare paid on all agricultural land in recognition of the contribution made to the cultural landscape.

    Structural payment to milk producers [1150.74.11]: Payment based on the number of animals,

    increasing up to 5 dairy cows or 27 milking goats, i.e. the same sum is paid (53,800 NKr) for all farms with five or more cows. Since 99.85% of farms exceed the cap in terms of animal units, this program is classified as a transfer not dependent on current commodity parameters, but requiring production. From July 2002 the scheme also applied for beef production on suckler cows, and the same rate is applied for all farms with more than 40 suckler cows.

E. Payments based on non-current area planted/animal numbers/ receipts/income production not

    required

    F. Payments based on non-commodity criteria

    F.1. Payments based on long-term resource retirement

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    F.2. Payments based on specific non-commodity output

    F.3. Payments based on other non-commodity criteria

    Extended support for landscape maintenance and development: Payments granted to farmers

    through management agreements between farmers and the governments to support: the development of access to agricultural fields for recreational purposes (paths and touring roads); the reconstruction and maintenance of cultural assets; the protection of traditional landscapes that cannot be provided through ordinary agricultural practices; the protection and development of areas with high biological diversity including wetlands and water courses; and restrictions on the use of pesticides and fertilisers. Can be granted to a group of co-operating farmers. Introduced in 1991 as an extension of the acreage and cultural landscape scheme and included in the Agricultural Development Fund [B.1150.50.11] since 1997.

G. Miscellaneous payments

    III.2 Percentage PSE [100 x (III.1) / ((I) + (Sum of A2 to G))]

    III.3 Producer NPC: For all agricultural commodities the producer NPC is estimated as a weighted average of the producer NPC calculated for the individual MPS commodities and shown in Table 4. For each commodity Producer NPC = [domestic price received by producers (at the farm gate) + unit payments based on output] / border price (also at the farm gate).

    III.4 Producer NAC [1 / (100 - (III.2)) x 100]

    IV. General Services Support Estimate (GSSE): total budgetary expenditure to support general

    services provided to agriculture [Sum of H to N].

    H. Research and development

    Agricultural experimental groups [B.1150.77.13]: Public expenditure for research linked to model

    farms. [More information is needed on the implementation of this support].

    Research, advisory and training services ["Group 1" expenditures]: Public expenditures for

    research, advisory and training services linked to model farms.

    Services for organic farming [part of B.1150.77.06]: Public expenditures for inspection, research,

    advice, market promotion, organisation and information linked to organic farming. (Acreage and headage support for organic farming is classified under III.1.C).

    Research for grains [part of B.1150.76.01]: Public expenditure for research on grain production

    under the grain and feed-stuff market system.

    Agricultural research stations [B.1112]: Public expenditure for agricultural research stations.

    Since 1994 it includes also pest and disease control expenditures for crops, which before were classified under payments based on the use of on-farm services (see above). Most of the pest and disease control expenditures are for a specific weed in oat seed production.

    Small animal fund [part of B.1150.50.03]: Public expenditure under the small animal fund used to

    support agricultural research.

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