Comparing U.S. and EU Program Support for Farm Commodities and Conservation

Renée Johnson
Specialist in Agricultural Policy

Charles E. Hanrahan
Senior Specialist in Agricultural Policy

Randy Schnepf
Specialist in Agricultural Policy

The European Union (EU) is one of the United States' chief agricultural trading partners and also a major competitor in world food markets. Both the United States and the EU provide significant government support for their agricultural sectors. In the United States, a large share of support is concentrated on wheat, feed grains, cotton, oilseeds, sugar, and dairy. The EU provides more extensive support to a broader range of farm and food products, including grains, cotton, rice, oilseeds, peanuts, dairy, and sugar, but also fresh and processed fruits and vegetables, and livestock products. In addition, starting in the 1980s, both the United States and the EU introduced policies and programs expanding the type and amount of support for agricultural conservation and so-called "agri-environment" practices on-farm. Compared to support for commodity production, however, support for agricultural conservation still constitutes a very small share of total farm-level support within both the EU and the United States. 

According to the Organization for Economic Cooperation and Development (OECD), the EU and the United States together account for more than 60% of all government support to agriculture among the major developed economies. In terms of total spending, EU agricultural support generally is much higher than in the United States, and the EU alone accounts for 50% of the OECD's total estimate. However, comparisons are complicated by significant structural differences between the U.S. and EU farm sectors. The United States has roughly twice the farmland base of the European Union, while the EU has six to seven times the number of farm operators spread across each of its 27 member countries. The EU program also supports a broader range of farm commodities as compared to the United States. 

Three general sources of quantitative data and information compare agricultural program support between the United States and the European Union. These include (1) the OECD's annual Producer Support Estimate (PSE); (2) estimates of the Aggregate Measurement of Support (AMS) for agricultural programs, as compiled by individual World Trade Organization (WTO) member countries and notified to the WTO as part of their membership obligations; and (3) annual budget expenditures for agricultural programs, as reported by individual countries. 

These data sources are useful in comparing farm program support across countries. The data indicate that, since the mid-1980s, total farm support in the United States and EU has declined as a share of total gross farm receipts. In general, support for commodity programs has decreased, whereas the support for non-commodity programs, such as farmland conservation and certain types of rural development programs, has increased. However, support for non-commodity programs still accounts for a small share (less than 1%) of farm receipts. As a share of overall farm receipts, support for such programs is slightly greater in the United States, where support for non-commodity programs accounts for less than 0.7% of receipts, than in the EU, where it accounts for less than 0.3% of receipts annually. In terms of total spending, however, the data show that the EU provides more support, in aggregate, than does the United States for both production-based programs and non-commodity programs, such as farmland conservation and agri-environmental programs. .


Date of Report: January 26, 2010
Number of Pages: 21
Order Number: R40539
Price: $29.95

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