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Gross domestic product (GDP) is a monetary measure of the market value of all the final goods and services produced and sold in a specific time period by countries. Due to its complex and subjective nature this measure is often revised before being considered a reliable indicator. GDP (nominal) per capita does not, however, reflect differences in the cost of living and the inflation rates of the countries; therefore, using a basis of GDP per capita at purchasing power parity (PPP) may be more useful when comparing living standards between nations, while nominal GDP is more useful comparing national economies on the international market. Total GDP can also be broken down into the contribution of each industry or sector of the economy. The ratio of GDP to the total population of the region is the per capita GDP.
Purchasing power parity (PPP) is the measurement of prices in different countries that uses the prices of specific goods to compare the absolute purchasing power of the countries' currencies. PPP is effectively the ratio of the price of a basket of goods at one location divided by the price of the basket of goods at a different location. The PPP inflation and exchange rate may differ from the market exchange rate because of tariffs, and other transaction costs.
A subsidy or government incentive is a form of financial aid or support extended to an economic sector generally with the aim of promoting economic and social policy. Although commonly extended from the government, the term subsidy can relate to any type of support – for example from NGOs or as implicit subsidies. Subsidies come in various forms including: direct and indirect.
Agricultural policy describes a set of laws relating to domestic agriculture and imports of foreign agricultural products. Governments usually implement agricultural policies with the goal of achieving a specific outcome in the domestic agricultural product markets.
An agricultural subsidy is a government incentive paid to agribusinesses, agricultural organizations and farms to supplement their income, manage the supply of agricultural commodities, and influence the cost and supply of such commodities.
Trade can be a key factor in economic development. The prudent use of trade can boost a country's development and create absolute gains for the trading partners involved. Trade has been touted as an important tool in the path to development by prominent economists. However trade may not be a panacea for development as important questions surrounding how free trade really is and the harm trade can cause domestic infant industries to come into play.
An indirect tax is a tax that is levied upon goods and services before they reach the customer who ultimately pays the indirect tax as a part of market price of the good or service purchased. Alternatively, if the entity who pays taxes to the tax collecting authority does not suffer a corresponding reduction in income, i.e., impact and tax incidence are not on the same entity meaning that tax can be shifted or passed on, then the tax is indirect.
The farm gate value of a cultivated product in agriculture and aquaculture is the market value of a product minus the selling costs.
The Commodity Credit Corporation (CCC) is a wholly owned United States government corporation that was created in 1933 to "stabilize, support, and protect farm income and prices". The CCC is authorized to buy, sell, lend, make payments, and engage in other activities for the purpose of increasing production, stabilizing prices, assuring adequate supplies, and facilitating the efficient marketing of agricultural commodities.
In economics, tax incidence or tax burden is the effect of a particular tax on the distribution of economic welfare. Economists distinguish between the entities who ultimately bear the tax burden and those on whom tax is initially imposed. The tax burden measures the true economic weight of the tax, measured by the difference between real incomes or utilities before and after imposing the tax, taking into account how the tax leads prices to change. If a 10% tax is imposed on sellers of butter, for example, but the market price rises 8% as a result, most of the burden is on buyers, not sellers. The concept of tax incidence was initially brought to economists' attention by the French Physiocrats, in particular François Quesnay, who argued that the incidence of all taxation falls ultimately on landowners and is at the expense of land rent. Tax incidence is said to "fall" upon the group that ultimately bears the burden of, or ultimately suffers a loss from, the tax. The key concept of tax incidence is that the tax incidence or tax burden does not depend on where the revenue is collected, but on the price elasticity of demand and price elasticity of supply. As a general policy matter, the tax incidence should not violate the principles of a desirable tax system, especially fairness and transparency. The concept of tax incidence is used in political science and sociology to analyze the level of resources extracted from each income social stratum in order to describe how the tax burden is distributed among social classes. That allows one to derive some inferences about the progressive nature of the tax system, according to principles of vertical equity.
Multifunctionality in agriculture refers to the numerous benefits that agricultural policies may provide for a country or region. Generally speaking, multifunctionality refers to the non-trade benefits of agriculture, that is, benefits other than commerce and food production. These include, in the WTO definition of multifunctionality, environmental protection, landscape preservation, rural employment, and food security. These can be broadly classified as benefits to society, culture, a national economy as a whole, national security, and other concerns. For example, in addition to providing food and plant-derived products for the population, agriculture may also provide jobs for rural people and contribute to the viability of the area, create a more stable food supply, and provide other desired environmental and rural outputs. A nice and clear summary of how more species may support multiple ecosystem functions and the state of biodiversity-ecosystem function research can be found by Slade et al.
Food versus fuel is the dilemma regarding the risk of diverting farmland or crops for biofuels production to the detriment of the food supply. The biofuel and food price debate involves wide-ranging views, and is a long-standing, controversial one in the literature. There is disagreement about the significance of the issue, what is causing it, and what can or should be done to remedy the situation. This complexity and uncertainty is due to the large number of impacts and feedback loops that can positively or negatively affect the price system. Moreover, the relative strengths of these positive and negative impacts vary in the short and long terms, and involve delayed effects. The academic side of the debate is also blurred by the use of different economic models and competing forms of statistical analysis.
In economics, gains from trade are the net benefits to economic agents from being allowed an increase in voluntary trading with each other. In technical terms, they are the increase of consumer surplus plus producer surplus from lower tariffs or otherwise liberalizing trade.
The Consumer support estimate (CSE) is an OECD indicator of the annual monetary value of gross transfers to (from) consumers of agricultural commodities, measured at the farm gate level, arising from policy measures which support agriculture, regardless of their nature, objectives or impacts on consumption of farm products. The CSE can be expressed in monetary terms; as a ratio to the value of consumption expenditure valued at farm gate prices, including budgetary support to consumers ; or as a ratio to the value of consumption expenditure valued at world market prices, without budgetary support to consumers.
The total support estimate (TSE) is an Organisation for Economic Co-operation and Development (OECD) indicator of the annual monetary value of all gross transfers from taxpayers and consumers arising from policy measures that support agriculture, net of the associated budgetary receipts, regardless of their objectives and impacts on farm production and income, or consumption of farm products. The TSE can be expressed in monetary terms or as a percentage of the gross domestic product. In addition to the TSE, other measures used to compare levels of support to agriculture across counties include the producer support estimate (PSE), consumer support estimate (CSE), and general services support estimate (GSSE).
The producer support estimate (PSE) is an indicator of the annual monetary value of gross transfers from consumers and taxpayers to agricultural producers, measured at the farm gate level, arising from policy measures that support agriculture, regardless of their nature, objectives or impacts on farm production or income. Examples include market price support, and payments based on output, area planted, animal numbers, inputs, or farm income. PSEs, which are updated and published annually by the Organisation for Economic Co-operation and Development, can be expressed in monetary terms: as a ratio to the value of gross farm receipts valued at farm gate prices, including budgetary support ; or, as a ratio to the value of gross farm receipts valued at world market prices, without budgetary support.
A price band is a policy instrument that serves to insulate domestic producers and processors when the world price for a commodity falls below a calculated reference price. Protection is provided by imposing a variable import levy on the imported commodity that raises the importer’s cost to the reference price. Chile, some Andean Group countries, and some Central American countries use price bands to protect specific commodity and processed food sectors.
A poundage quota, also called a marketing quota, is a quantitative limit on the amount of a commodity that can be marketed under the provisions of a permanent law. Once a common feature of price support programs, this supply control mechanism ended with the quota buyouts for peanuts in 2002 and tobacco in 2004.
The General Services Support Estimate (GSSE) is an Organisation for Economic Co-operation and Development (OECD) indicator of the annual monetary value of gross transfers of general services provided to agriculture collectively, arising from policy measures that support agriculture, regardless of their nature, objectives and impacts on farm production, income, or consumption of farm products. Examples include research and development, education, infrastructure, and marketing and promotion programs. The GSSE can be expressed in monetary terms or as a percentage of the total support to agriculture.
Sustainable Development Goal 2 aims to achieve "zero hunger". It is one of the 17 Sustainable Development Goals established by the United Nations in 2015. The official wording is: "End hunger, achieve food security and improved nutrition and promote sustainable agriculture". SDG 2 highlights the complex inter-linkages between food security, nutrition, rural transformation and sustainable agriculture. According to the United Nations, there are around 690 million people who are hungry, which accounts for slightly less than 10 percent of the world population. One in every nine people goes to bed hungry each night, including 20 million people currently at risk of famine in South Sudan, Somalia, Yemen and Nigeria.
References
- ↑ "OECD Glossary of Statistical Terms - Market Price Support (MPS) Definition". stats.oecd.org. Retrieved 2018-09-14.
- ↑ "2019 - Monitoring and evaluation : Reference Tables : Contribution of Market Price Support to change in Producer Support Estimate by country, 2017 to 2018". stats.oecd.org. Retrieved 2022-11-14.
This article incorporates public domain material from Jasper Womach. Report for Congress: Agriculture: A Glossary of Terms, Programs, and Laws, 2005 Edition. Congressional Research Service.
