By Nelson Larrea
CARACAS, Venezuela – Recently, the OECD and Peru’s Ministry of Agrarian Development and Irrigation (MIDAGRI) released the report ” Policies for the Future of the Agriculture and Food Sector in Peru,” as part of the country’s accession process to the international organisation. The same sectoral analysis was conducted in 2015 for Colombia in preparation for its 2020 accession and for Argentina in 2019 in response to its ongoing candidacy. Part of the OECD’s methodological framework includes its indicators supporting agriculture, which the Inter-American Development Bank (IDB) has incorporated into its Agrimonitor platform, making its analysis available for various countries. Based on the application of these tools, what are the main trends and strategic recommendations that stand out from the OECD’s perspective for agriculture in Latin America and the Caribbean (LAC)?
To begin, the OECD classifies the types of support for the sector into: ‘Estimated Producer Support’ (EAP), ‘Estimated Consumer Support’ (EAC), and ‘Estimated General Services Support’ (EASG), which together comprise the ‘Estimated Total Support’ (EAT). The EAP consists of market price support, direct transfers, and the estimate of unrealised costs, all measured at the primary production level. The EAC reflects the burden—an implicit tax—borne by consumers due to market price support mechanisms. General services are those that are key to promoting sectoral competitiveness, such as various public goods and services (infrastructure, research, extension, etc,). The balance of investments in these categories reveals whether a country is prone to greater or lesser protectionism versus an institutional framework capable of structuring and delivering specialised services that strengthen the productive base, although it does not measure or assess the effectiveness and impact of specific investments.
According to Agrimonitor (2023 data), Argentina, Chile, and Paraguay stand out as countries providing the most support through general services, with EASG (Agricultural Support for General Services) of 41.3 percent, 54.7 percent, and 53.9 percent, respectively, highlighting their investments in agricultural research, health services, productive infrastructure, and innovation systems. Likewise, Chile and Paraguay—along with Brazil—also have the highest levels of EAP (Agricultural Promotional Equity)—25.2 percent, 22.4 percent, and 19.1 percent, respectively—representing mainly direct transfers to the primary sector. Argentina registers a negative EAP (-19.3%), reflecting a net transfer from producers to other sectors of the economy, with an EAC (Agricultural Contribution Account) of 21.9 percent, and is the only country with a negative EAT (Agricultural Transactional Equity) (-1.9%), meaning the net effect of policies penalises the sector. In contrast, Costa Rica shows the highest EAT (3.15% of GDP), followed by Colombia (1.1%). Regarding the EAC (Economic Cost Index), the countries with the most significant negative levels are Peru (-33.7%), Paraguay (-30.6%), and Mexico (-23.1%), indicating that consumers are penalised by higher prices due to cost transfers to producers. Even though changes may have been made to the direction of these policies in our countries since 2023, the data reflect the heterogeneity of agricultural policy orientations in Latin America and the Caribbean.
Based on these analyses, the OECD proposes a significant boost to national research institutes and innovation in digitalization/Agtech and digital extension services. Good news in this regard is that, according to the Agtech Radar (IICA, EMBRAPA, SP Ventures, Homo Ludens – 2026), there are 2,656 technology-based startups in the sector. The highest concentration is in Brazil (2,075 companies), followed by Argentina (158), Mexico (110), and Colombia (79). However, the level of development of public institutions dedicated to R&D&I for agriculture is quite heterogeneous in Latin America and the Caribbean, with Brazil’s EMBRAPA standing out as one of the best-positioned cases.
The international organisation also highlights the importance of investments in irrigation and drainage to improve water efficiency—a crucial factor in the context of the El Niño phenomenon, particularly in drought-stricken areas and those prone to flooding, which continue to face drainage, conveyance, and storage challenges. It also emphasises the need to improve quality infrastructure, particularly in traceability and laboratories—key aspects for complying with international trade regulations stemming from environmental concerns such as the European “Zero Deforestation” directive, as well as maximum residue limits for pesticides, food safety standards, and related regulations. Among other factors, rural roads and market access, logistics, and cold chains are essential for addressing critical climate change scenarios and reducing food loss. In terms of information, agricultural censuses, statistical systems and observatories – such as the ILACC -CAF observatory for climate and competitiveness aspects and the OPSAA-IICA observatory for sectoral policies – are key to making forecasts and guiding business decisions and those of national authorities.
Finally, in their joint OECD-FAO report ‘ Agricultural Outlook 2025-2034,’ various scenarios are described, concluding that if investments in technologies that increase agricultural productivity by 15 percent materialise, global undernourishment could be significantly reduced during that period, which in turn could reduce greenhouse gas emissions by 7 percent if these technologies are climate-smart.
- Nelson Larrea is Senior Executive of the Private Sector Technical Analysis and Evaluation Directorate at CAF.
