Search Climate Insights Directory

The document defines anti-agricultural bias as a condition where policies and market failures disadvantage farmers relative to other economic sectors. It details four primary economic indicators for measuring this bias: the Nominal Rate of Protection, the Nominal Rate of Assistance, the Relative Rate of Assistance, and the Effective Rate of Protection. The report argues that while historical bias was driven by explicit taxes on agriculture and subsidies for industry, contemporary bias in non-transformed economies often stems from market failures, such as poor infrastructure and unbalanced market power. Through case studies of 12 countries, the report demonstrates that bias is often heterogeneous across different crops; for example, rice often benefits from protection via regional tariffs, while cash crops like tea or cashew nuts are frequently taxed. Specific country analyses reveal that in nations like Ethiopia and Zambia, high anti-agricultural bias is driven by low output prices and export bans, despite the presence of agricultural import tariffs.

The report examines subsidies in Indonesia's upstream oil and gas sector, identifying 17 potential subsidy activities categorized by WTO standards. It estimates total subsidies at US$ 1.799 billion for 2008, primarily driven by Domestic Market Obligation (DMO) oil subsidies. While some incentives successfully encouraged exploration and investment, the report notes a lack of evidence regarding their efficiency compared to alternative policy methods.