quantity of a good that costs $1 at the border, then an NRP of means that good has a domestic t value of (1+t). The PSE for this good is (2) This formula also has the useful feature of showing that the PSE must always lie between 0 and 1 for a positive rate of protection. The NRP, by contrast, can take any value. Rearranging equation (2) also allows us to move in the opposite direction: (3) t = OECD also calculates the Nominal Protection Coefficient (NPC) that includes budgetary outlays and treats input markets differently. It is the Producer Price plus the value per unit of payments based on output relative to the Reference Price. (PP (payments / NPC = + based on output or production quantity) RP) Transfers counted in the PSE include market price support, budgetary payments, and of revenue foregone by the government. The PSE has evolved from being just a measure of market price support to including payments based on output as well as well as expanding beyond taking into account just direct payments to multiple sources of payments. The Market Price Support (MPS) for a commodity is estimated either by adding together transfers to producers from consumers and taxpayers or by multiplying the quantity of production by the market price differential (the difference between farm and border price). The MPS component of PSE is similar to the NRP in that it also depends on price gaps. FAO-MAFAP (MAFAP 2016) and IDB-Agrimonitor (2016) use methodologies developed by the World Bank (NRA) and OECD (PSE) respectively. The World Bank has recently completed studies of three important South Asian countries—India, Pakistan and Sri Lanka—using the Anderson et al (2008) methodology. 3. Consortium structure and database The objectives of Ag-Incentives Consortium are to bring together the findings from the organizations active in this field on a continuing basis in order to develop a global view of incentives, and to shine a light on incentives in some of the smaller economies where distortions to agricultural incentives have a particular impact on the poor. The Ag-Incentives Consortium achieves
quantity of a good that costs $1 at the border, then an NRP of t means that good has a domestic value of (1+t). The PSE for this good is (2) This formula also has the useful feature of showing that the PSE must always lie between 0 and 1 for a positive rate of protection. The NRP, by contrast, can take any value. Rearranging equation (2) also allows us to move in the opposite direction: (3) t = OECD also calculates the Nominal Protection Coefficient (NPC) that includes budgetary outlays and treats input markets differently. It is the Producer Price plus the value per unit of payments based on output relative to the Reference Price. NPC = (PP + (payments based on output or production quantity) / RP) Transfers counted in the PSE include market price support, budgetary payments, and of revenue foregone by the government. The PSE has evolved from being just a measure of market price support to including payments based on output as well as well as expanding beyond taking into account just direct payments to multiple sources of payments. The Market Price Support (MPS) for a commodity is estimated either by adding together transfers to producers from consumers and taxpayers or by multiplying the quantity of production by the market price differential (the difference between farm and border price). The MPS component of PSE is similar to the NRP in that it also depends on price gaps. FAO-MAFAP (MAFAP 2016) and IDB-Agrimonitor (2016) use methodologies developed by the World Bank (NRA) and OECD (PSE) respectively. The World Bank has recently completed studies of three important South Asian countries—India, Pakistan and Sri Lanka—using the Anderson et al (2008) methodology. 3. Consortium structure and database The objectives of Ag-Incentives Consortium are to bring together the findings from the organizations active in this field on a continuing basis in order to develop a global view of incentives, and to shine a light on incentives in some of the smaller economies where distortions to agricultural incentives have a particular impact on the poor. The Ag-Incentives Consortium achieves
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