NZ's agriculture support lowest in OECD

New Zealand's farmers get the lowest amount of government support in the OECD. Photo / Hawkes Bay Today.

New Zealand has the lowest level of Government support for agriculture in the OECD, a new report shows.

The OECD's Agricultural Policy Monitoring and Evaluation report found New Zealand's level of government support for agriculture was just 1 per cent of farm income, well below the OECD average of 18 per cent.

The report noted most governments' support for agriculture was given in ways that distorted production and trade while doing relatively little to improve productivity and competitiveness, ensure sustainable resource use or help farmers cope with risk.

OECD trade and agriculture director Ken Ash said the time was ripe for reforming farm support.

"With tighter government budgets and farmers getting top prices for their crops, governments should begin to shift from payments that further support farm incomes and move to policies that have long-term benefits for the global food economy," he said.

Government support for agricultural producers across the OECD last year totalled US$227 billion ($NZ281b), or 18 per cent of total farm incomes - a record low linked to high commodity prices.

New Zealand's low level of government support was followed by Australia, at 3 per cent of farm income, and Chile, at 4 per cent.

OECD members with higher than average support included the European Union, at 22 per cent of farm income, with Norwegian producers receiving the most support, at 60 per cent.

The OECD said growing global food demand, higher prices, greater market volatitilty and increasing pressure on resources were arguments for moving beyond the status quo.

It said countries should focus on improving farm productivity, sustainability and long-term competitiveness, rather than policies that distort markets.