Revisiting Agricultural Domestic Support in the GTAP Data Base

Abstract

A comprehensive database on domestic support is key for any meaningful agri-food policy computable general equilibrium (CGE) analysis. In the GTAP database - the main data source used for global CGE analysis - domestic support levels are calculated from the OECD Producer Support Estimate (PSE). The current representation of domestic support in the GTAP database does not capture all agricultural support. Unilateral change in the GTAP accounting convention would lead to data discrepancies with other countries/regions (e.g., existing work on EU support).

Altogether, the PSE, the Consumer Support Estimate (CSE) and General Services Support Estimate (GSSE) cover most support specific to agriculture, even if they appear incomplete with some inconsistent regional and commodity coverage. Furthermore expanding agricultural support in the GTAP database does have some implication for output and price results when conducting policy analysis. There is a need to agree on a systematic approach to represent different types of policy instruments (without relying on a subjective allocation) and to avoid double accounting (e.g., with the information already accounted for by the countries' Input Output Tables).

This paper aims to determine the importance of embracing domestic support going beyond the PSE. It proposes an alternative representation of domestic support and quantifies effects induced by such changes. This research work might be seen as the first step towards a more comprehensive representation of the changing nature and magnitude of agricultural domestic support into the GTAP database.