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1986–88

–0.3

–1

0.91

2001–03

7.3

21

1.20

Country/period

PSE in billions of dollars

Percent PSE

Producer NPC

Canada 1986–88 2001–03

5.7 4.7

34 19

1.40 1.13

Table 5.3 Average annual farm support by country/region (producer support estimates)

1986–88

41.8

25

1.19

2001–03

44.2

20

1.12

1986–88

93.7

42

1.87

2001–03

101.7

35

1.34

1986–88

238.9

38

1.58

2001–03

238.3

31

1.31

Mexico

United States

European U

OECD

nion

PSE = producer support estimate NPC = nominal protection coefficient OECD = Organization for Economic Cooperation and Development

Note: The table shows average PSE over the given period. PSE measures the annual monetary value of gross transfers from consumers and taxpayers to agricultural producers. The percentage PSE is the ratio of the PSE to the value of total gross farm receipts, measured by the value of total production (at farm gate prices), plus budgetary support. NPC measures the nominal rate of pro- tection for consumers using the ratio between the average price paid by con- sumers (at farm gate) and the border price of imports, before tariffs or other re- strictions.

Source: OECD, OECD Agricultural Policies 2004: At a Glance.

surance Program (OECD 2000, 61). The Canadian federal government also slashed federal spending on agriculture from $6.1 billion in 1991–92 to about $3.3 billion in 2001–02.21 As a consequence, during the period be- tween 1986–88 and 2001–03, Canada’s producer support estimate de- clined by about 18 percent (table 5.3).

Nevertheless, domestic measures still ensure high internal prices for se- lected commodities. The Canadian government supports poultry, dairy, and eggs through supply management programs based on a combination of production and import quotas designed to maintain farm prices (espe- cially in Quebec) at high levels. Moreover, Canada charters state trading enterprises that handle import and export sales. The most controversial is the Canadian Wheat Board (CWB), discussed further below.

21. See Agriculture and Agri-Food Canada (AAFC), Farm Income, Financial Conditions, and Government Assistance Data Book, 2004; and Qualman and Wiebe (2002).

294

NAFTA REVISITED: ACHIEVEMENTS AND CHALLENGES

Institute for International Economics | www.iie.com

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