The pattern of incentives to agriculture is continuously changing, with assistance to agriculture provided by a wide range of measures, and protection rates varying not only in response to explicit changes in policy, but in response to movements in world agricultural prices. Regular monitoring of developments in agricultural incentives is needed to allow fact-based analysis of the impacts of reform.
To understand the impact of policy on agricultural returns in any country we obviously need information on that country’s own policy measures. But the collective impact of countries’ policies may influence the world prices of affected commodities. So, to understand the full impacts of intervention, we need estimates of the country’s own distortions and those in the countries covering a large share of global production.
Monitoring agricultural incentives on a continuing basis is a task beyond the capability of any one organization. The OECD plays a key role in this activity, collecting data on its member countries and a growing set of developing countries. Furthermore, many organizations, such as the Inter-American Development Bank, FAO-MAFAP and the World Bank collect data from a range of countries to help guide their own policy discussions. Without coordination, we face the risk of inefficiencies such as duplication of data collection efforts, unnecessary incompatibility of measures and unintentional omission of important case studies.
The objective of this Consortium is to bring together the findings from the organizations active in this field on a continuing basis in order to develop a global view of incentives, and to shine a light on incentives in some of the smaller economies where distortions to agricultural incentives have a particular impact on the poor. The Consortium is based on the Memorandum of Understanding for Co-operative Activities on Agricultural Incentives Measurement signed by the OECD; FAO-MAFAP; the Inter-American Development Bank; The World Bank; and IFPRI. The consortium is supported by funding from the Policies, Institutions and Markets Research Program of CGIAR. It stands ready to welcome any other institution with a serious commitment to measuring agricultural incentives.
The institutions measuring agricultural incentives use a combination of two main methodologies: indirect measurement of incidence or direct measurement of policies. With heterogeneity in the methodologies utilized and different data sets being employed, it has been difficult for policy makers to correctly measure and interpret the impact of their policy designs.
The Agricultural Incentives Consortium aims to create a community of practice, to provide a harmonized and consolidated database, and to provide a forum for discussion aimed at raising the quality and coverage of the available measures. The goals of the consortium include maintaining the autonomy and ensuring the consistency of each International Organization’s (IO) role with its mandate, creating a collaborative approach for database, with a clear recognition of Intellectual Property Rights. The initial focus has been on price distortions, with a consistent indicator based on each IO database. The NRP, based on Krueger, Schiff and Valdes (1988) has been selected to be computed and made publicly available. The NRP is a comparable with a proportional tariff rate that indicates the percentage increase in the domestic price of a good resulting from the intervention.
The Consortium also focuses on organizing further collaboration among IOs. A key goal of this collaboration is to provide a database of well-documented common indicators. A second goal is to facilitate expansion of country and product coverage. A third is to provide a forum for tackling new issues and improving methodologies.
The consortium is governed by a Board of International Organization representatives, an Informal Review Group, and a Technical Working Group. A requirement for a participating organization is to contribute to the public consortium platform in a way that meets the definitions and criteria developed by the consortium. IFPRI’s role in this initial phase focuses on development of the database platform, although we envisage that some units of IFPRI will contribute data in the future.
The Informal Review Group’s role is to ensure the quality of data and other information supplied to the common platform and to discuss and agree on methodological issues. Membership of the group will consist of one representative of each IO participating in the consortium. The group will act collectively as a “steward” of the platform between meetings of the Consortium, reviewing proposals for indicators to be included in the database. The Informal Review Group also acts as a clearing house for information about proposals to undertake new work to add countries or commodities to the consortium coverage, and will foster collaboration and partnerships in such new work, where common interests and capacity are identified.
The Technical Working Group, consisting of representative(s) of each of the participating organizations, ensures that technical solutions adopted in building the platform are as efficient as possible from the point of view of ensuring compatibility with the systems of the participating organizations, while also avoiding duplication of material between the Consortium platform and the dissemination tools of the IOs.
The group works closely together to: