Government farm subsidies generally do not work and most of the money never ends up as an income gain for farmers, according to a report by the OECD released today.
The Paris-based Organisation for Economic Co-operation and Development said its study showed only 25 per cent of state agriculture subsidies ends up as extra income for farmers.
"None of the support measures we studied would seem to provide long-term income benefits for farm households efficiently," the study concluded.
"It is clear that widely prevailing approaches to support are not efficient in improving farm household income, and even have the opposite effect of raising costs and reducing farm profitability over the longer term," it said.
The study said that because most of the aid is calculated on the basis of production, larger and richer farms tend to be the recipients of taxpayer subsidies.
It also found 40 per cent of the aid wound up going to farm suppliers and that 14 per cent went to extra rent for non-farming landlords.
The report suggested governments wanting to increase the income of farmers look to other methods besides agricultural policy.
"Many farm households already have income levels equivalent to or in excess of those of non-farm households. The public policy interest in these cases would seem to be poorly served with any income-related policy instrument," it said.
AFP