Key Details
The OECD’s Agricultural Policy Monitoring and Evaluation 2026 measures both budgetary support and the effects of policies that change domestic farm prices relative to international reference prices. That distinction is central to its India findings.
Measure | OECD Estimate |
|---|---|
Global agricultural support | Over US$950 billion in 2025, nearly 15% above 2023 |
India’s net producer support | −9.2% of gross farm receipts on average in 2023–25 |
India’s latest annual position | Improved from −10.6% in 2024 to −7.1% in provisional 2025 data, but remained negative |
India’s market-price effects, 2023–25 | About US$119 billion a year in negative support for affected commodities, alongside US$18 billion in positive support for others |
India’s budget payments to producers | Approximately US$54 billion a year in 2023–25, mainly input subsidies and direct payments |
The Producer Support Estimate combines these price effects with payments to farmers. A negative estimate does not mean each farmer paid a tax or received a lower price for every crop.
Farm Support and Farm Prices Pull in Opposite Directions
India provides substantial support through subsidised fertiliser, electricity and irrigation water, as well as direct payments such as PM-KISAN. Yet the OECD estimates that domestic marketing rules and trade measures depress prices for a number of products relative to international benchmarks. Across 2023–25, those negative price effects exceeded both positive price support for other commodities and budget payments to producers.
This is an aggregate result, not a uniform experience. The report identifies positive support for commodities including wheat, maize and sugar. India’s negative producer-support estimate also became less pronounced in 2025, although the provisional annual figure remained below zero.
Cheaper Food for Consumers Is Part of the Same Picture
Policies that hold down farm prices can benefit food buyers. India’s Targeted Public Distribution System provides additional budget-funded food support. Combining the relevant price effects and subsidies, the OECD estimates positive consumer support averaging 26.5% of consumption expenditure at farm-gate prices in 2023–25. This percentage does not represent food subsidies alone.
The competing effects explain why changing agricultural support is difficult: a measure that improves producer prices may raise costs for consumers, while a measure that contains food prices may reduce returns to some farmers.
Rising Global Spending Has Not Reversed Slower Productivity Growth
Across the countries studied, agricultural support has risen, but nearly half remains in forms the OECD considers potentially highly distorting. Meanwhile, global agricultural total factor productivity growth slowed from 1.8% a year in 1991–2000 to 0.8% in 2014–23. Spending on shared services—including research, innovation and infrastructure—has grown in absolute terms but declined relative to agricultural production.
In India, general-services spending averaged 4.3% of agricultural production value in 2023–25, with about 85% directed to infrastructure, particularly irrigation. The OECD argues for stronger investment in knowledge, market access and resilience alongside more coherent support for farmers.
Policy Relevance
India’s farm policy must serve small producers and food consumers at the same time. The OECD’s estimates show why adding another subsidy cannot be judged in isolation: its benefit to farmers may be offset by price and trade policies affecting the crops they sell. Equally, easing price restrictions without regard to staple-food affordability could shift costs onto households.
The report recommends improving agricultural markets, including e-NAM and state-level marketing reforms, making export rules more predictable, and gradually redirecting some input support towards productivity and sustainable resource use. The pace and design matter: small farmers need workable access to markets, finance and alternatives before existing support is reduced.
Follow the Full Report Here: OECD, Agricultural Policy Monitoring and Evaluation 2026: Enhancing Resilience in a World of Interconnected Risks