United States 

Department of 

Agriculture

Economic

Research

Service

Economic

Information

Bullentin

Number 74

March 2011

Classifying and Measuring 

Agricultural Support

Identifying Differences Between 

the WTO and OECD Systems

Anne Effland
www.ers.usda.gov

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Recommended citation format for this publication:

Effland, Anne. Classifying and Measuring Agricultural Support: Identifying 

Differences Between the WTO and OECD Systems. EIB-74, U.S. 

Department of Agriculture, Economic Research Service. March 2011. 
United States

Department

of Agriculture

www.ers.usda.gov

A Report from the Economic Research Service

Abstract 

Most countries provide some level of support to their agricultural sectors. Because 

support can affect producers and consumers in other countries, a number of systems 

have been developed to measure agricultural support levels and classify types of support 

in ways that facilitate comparing them across countries. The WTO and OECD employ 

similar classification systems, generally addressing the same question and measuring 

the same programs. However, results can be surprisingly and fundamentally different, 

rendering comparisons inappropriate, meaningless, or even wrong. Careful attention to 

the sources of difference can prevent potential misunderstandings and misleading uses.

Keywords: domestic support measurement, US agricultural policy, WTO, Aggregate 

measurement of support (AMS), Green box, Amber box, OECD, Producer support 

estimate (PSE), Consumer support estimate (CSE), General services support estimate 

(GSSE).

Acknowledgments

The author would like to thank the anonymous reviewers whose recommended changes 

greatly improved the report. She would also like to thank Gregg Young, Phil Jarrell, 

Susan Sadocha, and Art Coffing of USDA’s Foreign Agricultural Service, Carol 

Goodloe of USDA’s Office of Chief Economist, and Ed Young, Jim Stout, Joseph 

Cooper, and Sally Thompson of ERS for their comments on various versions of the 

report and its origins as a presentation at the workshop “Evolving Agricultural Policies 

in a Changing World,” co-sponsored by USDA, Agriculture and Agri-Food Canada, 

Mexico’s SAGARPA, and the OECD.

Anne Effland, aeffland@ers.usda.gov

Classifying and Measuring 

Agricultural Support

Identifying Differences Between 

the WTO and OECD Systems

Economic

Information

Bulletin

Number 74 

March 2011
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Contents

Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

How Do the Two Systems Measure Up? . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Correspondence Between the Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Using the WTO and OECD Measures of Support . . . . . . . . . . . . . . . . . 16

References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
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Summary

What Is the Issue?

Most nations provide some level of support to their agricultural sectors. 

Different types of support can affect producers and consumers both in the 

supporting country and in other countries. As such, measures of domestic 

agricultural support are highly contested in the negotiation of trade agreements. Two key systems have emerged for classifying and comparing agricultural support levels across countries. The World Trade Organization’s 

(WTO) notification system produces the Aggregate Measurement of Support 

(AMS); member governments, in adherence to a formal trade agreement, 

submit their own data, though such notifications may be submitted irregularly 

due to lack of capacity or lack of timely and complete data. The Organization 

for Economic Cooperation and Development’s (OECD) Producer Support 

Estimate (PSE) is also a consensus framework among member nations, but 

its purpose is to facilitate dialogue on policy reform and effective policy 

design. The OECD measure relies on data provided by members, supplemented with other sources by OECD experts in order to make annual estimates of transfers across sectors of the economy. 

Governments, nongovernmental organizations, researchers, and journalists 

use both measures regularly to compare the levels and types of support to 

agriculture across countries. Since both systems produce measures based 

on the same support programs, some users may attempt to use the OECD 

measure as a proxy for the WTO measure, which is more narrowly focused 

and more irregularly reported. But because these two systems were developed for different purposes, they are not identical in their classification 

schemes, their policy inclusiveness, and their methodologies. These differences can result in surprisingly different results.

What Did the Study Find?

•	The WTO classification system requires members to categorize their

programs according to rules regarding their expected trade-distorting 

impacts, which determines whether those programs are subject to each 

member’s maximum support commitments under the Uruguay Round 

Agreement on Agriculture. The OECD system classifies programs based 

on criteria related to program implementation, rather than expected 

impacts, and programs are separated based on whether support is to 

producers, consumers, or the agriculture sector generally. 

•	For the United States, these classification and measurement differences

are reflected in a higher level of domestic agricultural support reported 

under the OECD system compared to the WTO system. From 1995 to 

2007, annual domestic support reported under the WTO system ranged 

from 68 percent to 90 percent of that reported under the OECD system. 

•	In some cases the two systems employ different methods to measure the

same type of support; for example, the methods used by the WTO and 

OECD systems to calculate market price support (MPS) yield strikingly 

different results. Because the OECD method uses the gap between two 

current (domestic and world) prices to calculate MPS, the amount of 

MPS may vary widely from year to year. When world prices are high, the 
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gap between a supported domestic price and world price will likely be 

small, reducing MPS; when world prices fall, that gap will likely increase 

and MPS will be higher. In contrast, the MPS calculated under the WTO 

system compares the same fixed world reference price (the 1986-88 

average) with a domestic administered price, so when the domestic 

administered price is stable, the WTO’s MPS method will result in only 

slight variation from year to year based on changes in eligible production.

•	For the United States, the difference in methodology for calculating MPS

results in reported annual support differences ranging from $3 billion 

to $16 billion over 1995-2007. Combined with significantly different 

methods for classifying direct support to producers, these MPS results 

contribute to the OECD producer support estimate (PSE) ranging from 

$13 billion to $40 billion higher than the WTO aggregate measurement 

of support (AMS) over the same period. 

•	It may be possible to translate from one system to the other, perhaps to

recreate a missing year of data or to develop new composite indicators, 

but the task requires a detailed knowledge of the methodologies used 

by both systems, a detailed understanding of country policies, sufficient 

reporting transparency to identify individual programs, and some choices 

about how to recalculate unique measures, like MPS.

How Was the Study Conducted?

A comparative framework for analyzing the two domestic support measurement systems was built by examining the origins, purposes, and classification 

schemes of both through published documentation and their use in reports 

and databases since the mid-1990s. This framework allows for juxtaposing 

the detailed classification and measurement methods of each system and 

making direct comparisons of how they would be applied across a set of 

country policies. The impacts that the differing categorization and measurement methods could have on domestic support reporting are demonstrated 

by analyzing their application to U.S. programs and data reporting from 

1995 to 2007. The U.S. examples also provide an opportunity to clarify some 

common misconceptions about comparability between the WTO and OECD 

systems.
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Introduction

Most nations provide some level of support to their agricultural sectors. 

However, that support can take many forms. Different types of support can 

affect producers and consumers both in the supporting country and in other 

countries. As such, measures of domestic agricultural support are highly 

contested in the negotiation of trade agreements. The desire for discipline of 

levels of support has led to intense efforts to characterize the types of support 

and to measure their likely impacts on production, trade, and the well-being 

of producers and consumers. Out of these efforts have come a number of 

systems to measure agricultural support levels and classify types of support 

in ways that facilitate comparing them across countries. 

Two key systems for classifying and measuring domestic agricultural support 

have become widely accepted. One is the World Trade Organization’s 

(WTO) Domestic Agricultural Support Notification System, which produces 

a measure called the Aggregate Measurement of Support (AMS). The other 

is the Organization for Economic Cooperation and Development’s (OECD) 

Total Support Estimate, which produces a measure called the Producer 

Support Estimate (PSE) (table 1). 

The WTO notification system and AMS exist for the purpose of securing 

commitments within the legal framework of a formal trade agreement. 

The rules governing domestic support reporting reinforce the agreement 

by providing a means through which adherence to commitments can be 

assessed. The OECD classification system and total support estimates are 

also a consensus framework among members, but their purpose is to facilitate dialogue on policy reform. OECD measures focus on identifying transfers across sectors of the economy and provide a foundation for economic 

analysis of effective policy design. 

Table 1

Comparison of the WTO and OECD domestic support measurement 

system

WTO OECD

Purpose Evaluate

•	 Observance of trade

agreements

Facilitate

•	 Policy dialogue

Method Measure

•	 Trade-distorting support

•	 Based on negotiated criteria

related to expected trade 

impacts

Measure

•	 Support to sector

•	 Based on criteria related to

program implementation

Outcomes Annual notifications

•	 Assess adherence

to maximum support 

commitments

Comparative monitoring and 

evaluation report

•	 Assess policy reform

progress

•	 Research database

Source: Economic Research Service, USDA, based on WTO Notifications Handbook and 

OECD PSE Manual.
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The WTO system was developed during the Uruguay Round of negotiations of the General Agreement on Tariffs and Trade (GATT), which 

brought the world agricultural sector under the umbrella of this longstanding 

global trade agreement (WTO, 1994). The Uruguay Round Agreement on 

Agriculture (URAA) became part of the system administered by the World 

Trade Organization (WTO), which in 1995 superseded the GATT as the 

institution charged with establishing the rules of trade and providing a forum 

for members to monitor the world’s foremost multilateral trade agreement. 

Under the URAA, member countries (currently numbering 153) agreed to 

limit the most trade-distorting types of support provided to their domestic 

agricultural sectors. 

The URAA establishes a legally binding framework and requires annual 

reporting (notification) of domestic support to ensure transparency among 

members, all of whom can question each other’s notifications at regular 

meetings of the WTO Committee on Agriculture. WTO domestic support 

notifications are publicly available, and key summary data are available in 

spreadsheet format (WTO, DS:1 and Relevant Supporting Tables). However, 

more detailed data are available only through official documents accessed 

through a system that can be difficult and cumbersome to use.

The agricultural support measure adopted by the OECD—based on 

earlier work by Josling (1973) and originally called the Producer Subsidy 

Equivalent—was used in support of the Uruguay Round negotiations to 

quantify and categorize different policy instruments. In years since, OECD’s

system has been redesigned more than once and has been renamed the 

Producer Support Estimate (PSE). As member countries have adopted 

policies less directly linked to current production of individual commodities, the OECD measure has moved beyond a focus on commodity support 

and its cost to consumers to a more complex expression of the ways in 

which governments support their agricultural producers, consumers, and 

infrastructure.

The current OECD system no longer estimates all support in terms of individual commodity outputs. Initiated in response to the introduction of a

more complex array of program designs by member governments, it now 

captures policy support to producers based on current production factors 

and farm revenue, historical production, and non-commodity (for example, 

environmental) outputs. The OECD system supports an annual monitoring 

and evaluation exercise to assess the progress of agricultural policy reform 

in member countries, as well as agricultural policy development in selected 

emerging economies. The system helps members and observers to evaluate 

policy tools objectively, measure the support provided by their own policies 

in comparison with others, and develop “best practices” guidance based on 

empirical evidence. OECD also maintains an annually updated multiyear 

database accessible to the public (OECD, PSE/CSE database). 
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How Do the Two Systems Measure Up?

The two systems address the same questions—how much support do individual countries provide to their agricultural sectors and what forms does 

that support take? But while the OECD monitoring and evaluation reports 

are released on a regular annual schedule, offering users a constantly updated 

source of data, the WTO domestic support notifications are made available as they are submitted by member governments. The OECD measure 

relies primarily on data provided by member countries; when the data are 

incomplete, OECD experts identify other sources or develop estimates in 

order to meet the requirements of an annual publication. WTO notifications, in contrast, are completed by member governments themselves and 

may not be submitted regularly for a variety of reasons, including lack 

of capacity or lack of timely and complete data. Because the regularity of 

reporting varies widely, WTO notifications are a less dependable source of 

data from which to draw comparable measures of domestic support across 

countries. 

Both the OECD and WTO measures have been used by journalists, 

governments, non-governmental organizations, and researchers to 

report on the annual levels of support to agriculture, to provide a basis 

for comparing domestic support across countries in the context of trade 

negotiations and domestic policymaking, and to assess the character 

and potential impacts of various types of domestic support on markets 

and trade. Economists in particular have made use of these measurement systems in both qualitative and quantitative analyses of trade policy 

reform (Burfisher, 2001; Takahashi, 2009; Orden et al., 2011). 

Since both systems measure essentially the same support programs, it may 

seem reasonable to use the OECD measure (for those countries for which 

PSEs are available1) as a proxy for the WTO measure to account for those 

years in which WTO notifications data are not available for all members. 

But because these two measures were developed for different purposes, 

they are not identical in their classification schemes, their policy inclusiveness, and their measurement methodologies. These differences can result in 

surprisingly different support totals, as a comparison of the WTO and OECD 

support totals for the United States shows (fig. 1). From 1995 to 2007, annual 

domestic support reported under the WTO system ranged from 68 percent to 

90 percent of that reported under the OECD system.

WTO Domestic Agricultural Support Notifications

The WTO system provides for annual reporting of domestic support to 

agriculture, based on a classification of support agreed upon by members. 

Members are expected to provide an annual accounting of their domestic 

support, including market price support and budgetary expenditures, to be 

circulated to other members through the WTO Committee on Agriculture 

(COA). Although the COA staff facilitate the process through advice and 

assistance, the individual member governments are responsible for the data 

and measures presented. Their reports are subject to questioning by other 

WTO members, but final content is determined by individual members. 

1PSEs are produced for the EU and 

all other OECD member countries, and 

for some nonmember countries, including Brazil, China, the Russian Federation, South Africa, and Ukraine.
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The classification system requires members to categorize their programs 

according to specified criteria, which identify those programs that may be 

exempted from reporting as trade-distorting support (table 2). Policies that 

do not meet the criteria for exemption are by default determined to be tradedistorting, and any support they provide is subject to a maximum support 

commitment under the URAA. Programs are exempt if they meet the criteria 

for one of three categories:

•	Policies that are at most minimally trade-distorting (“green box”),

•	Policies that involve production limits (“blue box”), and

•	Policies used by developing country members in the context of broader

development programs and that provide development assistance for 

their low-income and resource-poor populations, as well as support to 

producers to encourage diversification away from growing illicit narcotic 

crops (“development box”). 

All other policies are subject to maximum support commitments and are 

reported as part of the Aggregate Measurement of Support (AMS), or the 

“amber box.” Within the AMS, programs may be reported as product-specific 

support (associated with production of a specific commodity) or as nonproduct-specific support (cannot be assigned to specific commodities). 

In the final calculation of support subject to a maximum commitment, the de 

minimis rule allows countries to exclude support from the product-specific 

or nonproduct-specific categories that falls below certain spending limits. 

For product-specific categories, the de minimis limit is 5 percent (10 percent 

for developing countries) of the value of production of the specific product; 

for the nonproduct-specific category, the limit is 5 (10) percent of the country’s total value of agricultural production. (See WTO, 1994, for the official 

domestic support notification requirements.)

Note: WTO Total Domestic Support includes green box, blue box (1995 only), AMS, and de minimis (support less than 5 percent the 

value of production) exemptions; OECD Total Support Estimate includes PSE, GSSE, and CSE (see table 2 for definitions).

Source: ERS, using data from OECD PSE/CSE database and ERS U.S. WTO domestic support dataset.

Figure 1

OECD Total Support Estimate and WTO Total Domestic Support for the United States, 1995-2007 

Percent

1995 96 97 98 99 2000 01 02 03 04 05 06 07

0

20

40

60

80

100

120

Total OECD

Total WTO
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OECD Agricultural Policy Reform 

Monitoring and Evaluation 

The OECD system operates as part of an annual monitoring and evaluation 

process carried out by the OECD Directorate for Trade and Agriculture. 

Member countries contribute to the collection of relevant data, but OECD 

staff are responsible for the reporting process and final calculations, subject 

to members’ review. 

OECD’s classification system is based on the principle of estimating transfers to producers, both individually and collectively, through policy measures 

(table 2). The classification system for transfers to individual producers bases 

categorization on the implementation criteria of each policy, rather than the 

WTO criteria of whether policies are trade-distorting. OECD members have 

agreed that the potential trade-distorting impacts of various program designs 

should not be addressed in the classification scheme (OECD, Introduction to 

the PSE and Related Indicators).

The OECD classification system divides programs into three overarching 

categories, based on whether the programs are directed:

•	to individual producers—the Producer Support Estimate (PSE),

•	to producers collectively—the General Services Support Estimate

(GSSE), or

•	to consumers (first consumers at the farm gate, most often processors

rather than final consumers)—the Consumer Support Estimate (CSE). 

The total of these three categories produces the Total Support Estimate 

(TSE). Within each of these larger categories, the classification system 

further divides transfers based on a hierarchy of implementation criteria. 

Table 2

WTO and OECD main classification categories

WTO OECD

•	 “Amber box” (AMS)

— De minimis exemptions exclude 

support less than 5% of the value 

of production (10% for developing

countries)

•	 “Blue box” (production limiting)

•	 “Development box” (development

measures—developing countries 

only)

•	 “Green box” (minimally trade

distorting)

•	 Producer Support Estimate (PSE)

•	 General Services Support Estimate

(GSSE)

•	 Consumer Support Estimate (CSE)

Source: Economic Research Service, USDA, based on WTO Notifications Handbook and 

OECD PSE Manual.
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PSE criteria divide transfers among those based on output; those based on 

inputs; those based on area, animal numbers, farm receipts, or farm income 

(A/An/R/I); and those based on non-commodity criteria like environmental

benefits. Within the category of A/An/R/I, a further distinction is made based

on whether current commodity production is required to receive the transfer, 

and if so, whether it requires production of a specific single commodity, 

a group of specified commodities, or any commodity. These categories 

reflect an effort to organize the classification system to capture members’ 

policy reforms. New transfer programs have moved substantial amounts of 

support away from traditional output and input subsidies to support based on 

current production factors and farm revenue, historical production, and noncommodity outputs. 

The categorization in the GSSE and CSE is less hierarchical. GSSE categories include expenditures on research and development, agricultural schools, 

inspection services, infrastructure, marketing and promotion (including 

foreign food aid), and public stockholding. CSE categories include transfers 

associated with policies that raise commodity prices to consumers (the cost 

to consumers of market price support policies); commodity-specific transfers, 

such as the share of benefits retained by sugar processors under the sugar 

loan program; and noncommodity-specific transfers, such as domestic food 

assistance programs.

OECD goes beyond this initial classification with additional measures of how 

agricultural support is provided. These calculated measures include:

•	Percentage PSE (%PSE), which indicates the share of producer income

(gross farm receipts) that comes from transfers from consumers and 

taxpayers; 

•	Nominal protection coefficient (NPC), which indicates the share of transfers to producers based on commodity output; 

•	Percentage single commodity transfer (%SCT), which indicates the share

of transfers to producers requiring production of a specific commodity; 

•	Nominal assistance coefficient (NAC), which indicates the share of transfers to producers from all policy measures; and 

•	Percentage total support estimate (%TSE), which indicates the share of

GDP represented by all measures supporting agriculture. 

(See OECD, PSE Manual, for further details on these calculated indicators 

and other aspects of the OECD classification system.)
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Correspondence Between the Systems

Despite the apparent similarities between these two systems, there are significant differences across the categorization schemes that limit correspondence 

between the two systems and their measures. For example, it might appear 

that the WTO’s green box is roughly equivalent to the OECD’s GSSE and 

CSE, since these categories include many of the same general services and 

consumer support programs. But the WTO’s green box actually incorporates 

a number of policies that are classified by OECD in the PSE, including environmental payments, technical assistance, decoupled income support, disaster 

relief, and some credit programs. Similarly, some programs that are included 

in the OECD’s PSE and GSSE are not included as part of the WTO domestic 

support notification at all. Foreign food aid, tariffs, and export subsidies are 

all reported to the WTO through other notification processes. Moreover, in 

some cases, the two systems employ different methods of measuring the 

same type of support. Both the WTO and OECD systems calculate market 

price support, but their methods produce very different results. 

WTO’s AMS vs. OECD’s PSE

The comparability across the two systems, or lack thereof, may be shown by 

consideration of the WTO’s Aggregate Measure of Support (AMS) and the 

OECD’s Producer Support Estimate (PSE). Because both measures calculate direct support to producers, it may seem reasonable to assume that the 

measures are equivalent, or that having access to a country’s PSE data would 

account for its AMS in years for which a country has not yet submitted a 

WTO domestic support notification.

That assumption would be incorrect. Some transfers included in the PSE—

such as foreign food aid, tariffs, and export subsidies—are not covered as 

domestic support under the URAA. Thus, they are not reported as part of 

the AMS. The difference in total support as measured by these two categories is evident in comparing the PSE and AMS for the United States (fig. 

2). The difference in methodology for calculating MPS results in reported 

support differences ranging from $3 billion to $16 billion over 1995-2007. 

Combined with significantly different methods for classifying direct support 

to producers, these MPS results contribute to the OECD’s PSE ranging from 

$13 billion to $40 billion higher than the WTO aggregate measurement of 

support (AMS) over the same period.

The AMS includes all product-specific and non-product-specific support 

subject to a maximum commitment under the URAA. This includes transfers from higher market prices provided to producers through commodity 

price support programs. It also includes the value of support to producers

from programs tied to production of specific commodities, whether through 

payments directly to producers or through other benefits like interest subsidies, 

and the value of payments and other benefits to producers through programs 

not tied to specific commodities. Support under these latter two categories, 

however, may be excluded from the maximum commitment ceiling—and thus 

deducted from the AMS—under the de minimis rule (table 3). 
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Source: ERS, using data from OECD PSE/CSE database and ERS U.S. WTO domestic support dataset.

Figure 2

OECD’s Producer Support Estimate (PSE) and WTO’s Aggregate Measure of Support (AMS) 

for the United States, 1995-2007 

$ billion

1995 96 97 98 99 2000 01 02 03 04 05 06 07

0

10

20

30

40

50

60

PSE

AMS

Table 3

OECD’s Producer Support Estimate (PSE) and WTO’s Aggregate 

Measure of Support (AMS) subcategories

AMS PSE

Product-specific support

•	 Market price support

•	 Direct non-exempt payments

•	 Other non-exempt payments

Non-product-specific support

De minimis exemptions

	 Any support less than 5% of the

value of production (10% for

developing countries). For productspecific support, the total must be 

less than 5% (10%) of the value of

production of that commodity; for

non-product-specific support, the

total must be less than 5% (10%)

of the total value of agricultural 

production. 

A. Support based on commodity

output

1) Market price support

2) Payments based on commodity

 output

B. Payments based on input use

1) Variable inputs

2) Fixed capital formation

3) Onfarm services

C. Payments based on current area/

animal numbers/ receipts/income

(A/An/R/I)

D. Payments based on non-current

A/An/R/I, production required

E. Payments based on non-current

A/An/R/I, production not required

F. Payments based on noncommodity

criteria

1) Long-term resource retirement

2) Specific non-commodity output

3) Other non-commodity criteria

Source: Economic Research Service, USDA, based on WTO Notifications Handbook and 

OECD PSE Manual.
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The PSE captures much more product-specific and nonproduct-specific 

support to producers, as well as other support that under the WTO system is 

exempt from reporting as part of the AMS (table 3). The PSE classification 

system incorporates transfers to producers based on output, both through 

market price support and through per-unit payments. It also includes transfers based on the producers’ use of inputs, including variable inputs (fertilizer, fuel, etc.), fixed capital formation (structures, equipment, etc.), and 

onfarm services (primarily technical assistance). Transfers based on land 

area, animal numbers, farm receipts, or farm income are also included, and 

grouped by whether they require current production. Finally, included are 

transfers related to non-commodity criteria, including resource retirement, 

non-commodity outputs (like maintenance of certain landscape features), and 

other non-commodity bases (e.g., flat rate payment per farm).

The OECD’s PSE also incorporates a number of policies that may be reported 

in the WTO green box category of minimally trade-distorting support. These 

include environmental programs, decoupled income support, and some disaster 

relief and credit programs. Because the PSE classification principle does not 

consider the objectives of transfers, programs like environmental payments 

are classified based on the way they are implemented. Thus, if payments help 

producers alter their use of variable inputs—limiting fertilizer or pesticide use, 

for example—the program benefits would appear in the category for transfers 

based on use of variable inputs. Similarly, if payments are made to producers 

per animal to support a reduced pasture load, those benefits would appear in the 

category for transfers based on current animal numbers (A/An/R/I). Decoupled

income support, as a transfer to individual producers (in the sense that the land 

on which it is based remains in agriculture, although it may idled), is included 

in the PSE and is similarly categorized on the basis of the payment. If support

is paid on historical production area or receipts, it will be included in the category for transfers based on non-current area/receipts and not requiring production (A/An/R/I, production not required).

The same contrast between the WTO and OECD systems holds for disaster 

and credit programs. In the WTO system, members report some types of

these programs in the green box, based on criteria for what is considered 

minimally trade-distorting. In the PSE, benefits are classified according to

how the benefit is provided. If the payment is per unit of output, it is classified in the category for payments based on commodity output; if the payment 

is based on area or animal losses, it is classified in the category for payments 

based on current area or animal numbers (A/An/R/I).

The implications of these major differences in categorization and inclusion 

can be seen in a comparison of the AMS and PSE by subcategory for the 

United States (fig. 3). While there is some movement in all support categories 

over time, the PSE category for support based on commodity output varies 

more than others and follows a pattern countercyclical to the rise and fall of 

market prices that drive most of these output programs. Since these are the 

programs that make up the bulk of the AMS, the two categories track fairly 

closely, although for the United States the AMS falls below the PSE output 

support category in most years. This can be explained almost entirely by the 

difference in measurement methodology for the component both systems call 

market price support.
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Market Price Support in the AMS and PSE

Market price support (MPS) in both the WTO and OECD classification 

systems is meant to capture the support provided to producers through 

measures that raise prices in the domestic market higher than they would 

be otherwise. These programs are generally operated by limiting imports 

through tariffs, through government purchases of commodities, and/or 

the use of export subsidies to support a domestic floor price. Often these 

measures are used in combination, since maintaining domestic floor prices 

requires limiting competition from imports to avoid supporting the prices of 

commodities produced in other parts of the world.

In both the AMS and PSE, the MPS methodology is based on measuring

a price gap—the difference between a supported domestic price and the 

price at the country’s borders, or a world reference price. The key difference results from the domestic and world reference prices used by each 

method and the set of commodities to which the method is applied. The AMS 

measure of market price support is based on a fixed, historical world reference price—as determined in the URAA in 1994—and applies to commodities for which a country maintains a statutory administered price. The PSE 

measure is based on current world reference prices and applies to commodities for which there is a measurable gap between the country’s current 

domestic farm price and the world reference price.2

The AMS calculation of market price support was developed and agreed 

to by all members in the URAA. It compares a fixed historical world reference price for the commodity in question to a country’s current administered 

domestic price for that commodity and then applies the difference to the 

2The URAA specifies commodity 

coverage using the Harmonized System 

(HS) commodity codes developed by 

the World Customs Organization. The 

coverage is broad, including all animal 

(except fish and seafood), vegetable, 

and processed food products (HS 

chapters 1-24), plus edible oils, skins 

and hides, and raw natural fibers. The 

OECD focuses on a set of 15 common 

agricultural commodities for all member countries, plus additional commodities for each country to support actual 

price gap measurement for at least 70 

percent of the total value of production 

for that country. The full MPS applies 

the average for covered commodities to 

the remaining 30 percent of the value 

of production. Although this difference 

could lead to more inclusive commodity coverage in the AMS than in the PSE 

market price support measure, most 

countries report AMS market price 

support to the WTO for only a limited 

number of products.

A/An/R/I = payments based on area, animals, receipts, or income.

Source: ERS, using data from OECD PSE/CSE database and ERS U.S. WTO domestic support dataset.

Figure 3

PSE components compared with AMS for the United States, 1995-2007 

$ billion

1995 96 97 98 99 2000 01 02 03 04 05 06 07

0

10

20

30

40

50

60

Output Input use

A/An/R/I Non−commodity

AMS
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eligible production3 of that commodity to estimate the support provided to 

producers: 

WTO MPS = (current domestic administered price - 1986-88 average 

world reference price) * eligible production. (1)

For example, the U.S. dairy MPS for 2007 was calculated as:

WTO MPS = ($218.258/metric ton - $159.825/metric ton) * 85.759 million 

metric tons = $5.012 billion. 

The administered price used in the AMS MPS calculation may not reflect 

actual returns to producers if it is a floor price that triggers only when market 

prices fall below that level. Other policies in place such as tariffs and export 

subsidies may have more impact on producer prices than the administered 

price. The method does not make explicit reference to any border measures 

that might be in place in conjunction with the administered price support 

system—in the WTO, tariffs and export subsidies are notified separately 

from domestic support (WTO, 1994). Also, if the calculation yields a negative result, the MPS is generally reported as zero.

The URAA includes an alternative calculation when it is not practical to use 

the price gap methodology, as when no appropriate world reference price 

can be determined. The methodology for this Equivalent Measurement of 

Support (EMS) either multiplies the administered price times the quantity of 

production eligible to receive that price, or reports budgetary outlays used to 

maintain the producer price at the administered price level (WTO, 2003).

Commodity coverage under the AMS MPS is limited to production for which 

there is a statutory administered price. For the United States, that means 

market price support has been calculated for the dairy and sugar price support 

programs alone since 2002. Before the 2002 Farm Act ended the peanut 

price support program, peanuts were also included. Because the world reference price is fixed by the URAA, as long as the statutory administered price 

does not change, MPS for a commodity will vary only with eligible production. For the United States, eligible production of both dairy and sugar4 has 

remained fairly constant, which is reflected in the level of AMS MPS (fig. 4.)

Market price support (MPS) in the OECD classification system is a more 

complex calculation, although it is also based on a price gap concept. The 

method for calculating the PSE MPS for any commodity is to compare the 

domestic farm-level price with an appropriate world price, usually determined as the price of that commodity at the country’s border, adjusted to the 

farm level. For exporting countries, the appropriate border price is generally 

the FOB (free on board) unit value; if the country is an importer, the appropriate border price is generally the CIF (costs, insurance, freight) unit value.

The differential, or price gap, is then applied to the country’s total production 

of the commodity. Subtracted from the result are any contributions producers 

make to the MPS through levies or through “excess feed costs,” the share 

of feed grain MPS that livestock producers have contributed through higher 

prices for feed (see equation 2).

3 Member countries decide what 

constitutes eligible production for their 

AMS MPS calculations, leading to differences in the way MPS is measured. 

For example, some countries include all 

production of the supported commodity, 

while other countries may include only 

the quantity purchased by government 

at the administered price. As a result, if 

the same commodity is included in both 

the AMS and PSE MPS, the quantities 

used may be substantially different.

4 The United States used total quantity of milk produced as eligible production for the dairy MPS through 2007. 

For sugar, the total quantity of sugar 

produced served as eligible production 

through 2001. After the 2002 Farm Act, 

eligible production became the smaller 

of total quantity of sugar produced or 

the Overall Allotment Quantity (OAQ), 

which governs the quantity of sugar 

that can be marketed in a given year.
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PSE MPS = [(Domestic farm-level price - border farm-level price) * 

quantity produced] – producer levies – excess feed costs. (2)

For example, the U.S. dairy MPS for 2007 was calculated as:5

PSE MPS = [($421.74/metric ton - $318.40 /metric ton) * 84,233 million 

tons] – 0 – 0 = $8.7 billion.

The PSE method calculates MPS for 15 common commodities—wheat, 

maize, other grains, rice, rapeseed, soybeans, sunflowers, refined sugar, 

milk, beef and veal, sheepmeat, wool, pigmeat, poultry, and eggs—across 

all OECD member countries. For each country, MPS is estimated for additional commodities based on their share of a country’s value of production to 

ensure that at least 70 percent of the total value of agricultural production is 

covered. For some countries, MPS may be zero for some of the common and 

additional commodities. An extrapolation procedure is used to estimate total 

MPS for use in the PSE:

PSE MPS = (Sum of MPS of individual commodities/sum of 

value of production (VoP) of individual commodities) 

* VoP of all commodities. (3)

As a comparison between the WTO dairy MPS ($5.01 billion) and the OECD 

dairy MPS ($8.7 billion) highlights, these two methods can yield widely 

differing results. Because the OECD method uses the gap between two 

(domestic and world) current prices to calculate MPS, the amount of market 

price support varies according to both current prices and current production. For the United States, most of the MPS is accounted for by dairy and 

sugar, with a small amount for sheepmeat. Since 1995, the U.S. MPS has 

also included wheat, beef, poultry, eggs, and cotton at much lower support 

5Eligible production differs between 

WTO and OECD calculations because 

of different year definitions. The WTO 

marketing year for dairy begins October 1 of the notification year (October 

1, 2007, for the 2007 domestic support 

notification). OECD uses the calendar 

year.

Source: ERS, using data from OECD PSE/CSE database and ERS U.S. WTO domestic support dataset. As noted in the text, the PSE and AMS 

market price support measures include different commodities. For the United States, the PSE includes wheat, maize, other grains, rice, 

rapeseed, soybeans, sunflowers, refined sugar, milk, beef and veal, sheepmeat, wool, pigmeat, poultry, eggs, and cotton, while the AMS 

includes only peanuts, dairy, and sugar before 2002 and only dairy and sugar from 2002 forward.

Figure 4

U.S. market price support as measured by the WTO and OECD, 1995-2007 

$ billion

1995 96 97 98 99 2000 01 02 03 04 05 06 07

0

5

10

15

20

25

PSE

AMS
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levels than for dairy and sugar. As a result, the PSE measure, following a 

pattern countercyclical to the rise and fall of commodity prices, is much more 

variable than MPS calculated for the AMS. When world prices are high, the 

gap between the supported domestic price and world price will be small, 

reducing MPS (as in 2006); when world prices fall, the gap increases and 

MPS is higher (as in 1999) (fig. 4). In contrast, the MPS calculated for the

AMS compares the same fixed world reference price with a stable domesticadministered price, resulting in only slight variation from year to year based 

on changes in eligible production. 

Comparing Across WTO Exempt Support (Green, Blue, 

and Development Boxes) and the OECD’s GSSE/CSE

While the AMS and PSE encompass some major differences of inclusion and 

method, virtually all of the budgetary programs included in the AMS appear 

in the PSE. Other categories of the WTO’s domestic support notification 

are not so easily compared. Blue box programs and development measures 

are, by definition, support that would otherwise be subject to maximum 

support commitments under the URAA and included in the AMS, except 

that they are exempted for specific agreed reasons. Blue box programs are 

most likely to appear in the OECD’s A/An/R/I categories, since productionlimiting programs have generally employed area or animal number limits. 

Development measures would generally appear among the categories for 

support based on input use (variable input use, fixed capital formation, and 

onfarm services) for those developing countries for which a PSE is calculated.

The United States has had no blue box programs since 1995, when deficiency 

payments and acreage reduction programs ended. The United States is not 

entitled to exempt development measures, but does notify programs in most 

green box categories. 

WTO green box programs are similar to the OECD’s GSSE and CSE categories since they include many of the same programs that provide support for 

“general services” and “consumers” (table 4). However, these categories do not 

neatly track from the WTO to the OECD classification systems. For example, 

U.S. program spending reported as WTO green box consistently exceeds the 

total outlays reported as OECD’s GSSE and CSE categories (fig. 5).

There are several key factors that account for the differences between the 

OECD and WTO measures. Most importantly, the OECD’s CSE captures 

transfers from consumers to producers that reflect the cost of the higher 

market prices created through market price support policies. The share of 

those higher prices, or price transfers, that apply to imported commodities are 

accounted for as “other transfers from consumers” to differentiate them from 

transfers to domestic producers. This part of the CSE measure is generally 

negative, since it is meant to “credit” consumers for policies that create transfers through higher prices. Other components of the CSE include support 

to consumers from taxpayers, in particular the farm share of domestic food 

assistance, but also payments to processors. A final component, excess feed 

costs, accounts for the share of market price support paid for by livestock 

producers through increased feed prices. In the United States, these latter two

components of the CSE have been very low and often zero (fig. 6).
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Source: ERS, using data from OECD PSE/CSE database and ERS U.S. WTO domestic support dataset.

Figure 5

General Services Support Estimate/Consumer Support Estimate (OECD) and green box support (WTO) 

levels for the United States, 1995-2007 

$ billion

1995 96 97 98 99 2000 01 02 03 04 05 06 07

-20

0

20

40

60

80

CSE GSSE Green box

Table 4

WTO’s green box and OECD’s General Services Support Estimate/

Consumer Support Estimate subcategories

WTO OECD

Green box

General services (includes research,

extension, inspection, infrastructure, and 

domestic marketing programs)

Public stockholding

Domestic food aid

Decoupled income support

Income insurance and safety net

Relief from natural disasters

Structural adjustment—producer 

retirement

Structural adjustment—resource 

retirement

Structural adjustment—investment aids

Environmental payments

Regional assistance

GSSE

Research and development

Agricultural schools

Inspection services

Infrastructure

Marketing and promotion

Public stockholding

Miscellaneous (e.g., undifferentiated

state-level expenditures)

CSE

Transfers to producers from consumers

Other transfers from consumers

Transfers to consumers from taxpayers

Excess feed costs

Source: Economic Research Service, USDA, based on WTO Notifications Handbook and 

OECD PSE Manual.
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Other differences between the WTO’s green box and the OECD’s GSSE 

and CSE totals are accounted for by a number of payments to producers that 

are exempted from maximum support commitments in the WTO agreement. 

They are reported in the green box because they are considered to have, at 

most, a minimal impact on trade—decoupled income support, certain types 

of income insurance and safety-net programs, certain types of disaster relief, 

certain types of structural adjustment expenditures for producer and resource 

(usually land) retirement and for investment aids (e.g., credit subsidies), environmental payments, and regional assistance programs. These expenditures 

appear in the PSE portion of the OECD classification system because they 

represent transfers to producers. In combination with removing the CSE MPS 

measure, they account for the difference between the GSSE/CSE and green 

box totals (fig. 7).

Source: ERS, using data from OECD PSE/CSE database.

Figure 6

Consumer Support Estimate subcategory shares for the United States, 1995-2007 

$ billion

1995 96 97 98 99 2000 01 02 03 04 05 06 07

-30

-20

-10

0

10

20

30

Transfers from consumers (MPS)

Domestic food assistance (farm share)

Transfers to processors

Excess feed costs

Source: ERS, using data from OECD PSE/CSE database and ERS U.S. WTO domestic support dataset.

Figure 7

General Services Support Estimate, non-Market Price Support Consumer Support Estimate, and selected 

WTO green box subcategories compared with total green box support level, United States, 1995-2007

$ billion

1995 96 97 98 99 2000 01 02 03 04 05 06 07

0

20

40

60

80

100

Non−MPS CSE

GSSE

Green box decoupled support

Green box disaster assistance

Green box environmental payments

Green box investment aids

Total green box
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Using the WTO and OECD Measures of Support

Despite many similarities between the WTO and OECD systems for 

measuring domestic agricultural support, using one system to understand the 

other or to translate a country’s policies from one to the other is not straightforward. Because of the divergent purposes and development of the two 

systems, key differences in classification and methodologies create significant variations in the measures produced. In some cases, it may be possible

to work carefully from one system to the other to estimate a domestic 

support measure, either to recreate a missing year of data or to develop 

some different configurations of domestic support totals that might combine 

programs and categories of support from both systems. However, translations 

across systems may not be possible or even appropriate given the potential 

for misleading results.

Individual programs that make up the WTO domestic support notifications

and OECD monitoring and evaluation reports are, in most cases, referred to 

by the same program names. For measures that do not vary according to the 

internal rules of the reporting systems, it is possible to locate and transfer the 

data on those programs and their expenditures from one system to the other. 

For some programs, the process simply involves identifying a single program 

designation in both reporting systems. For others, it requires locating split 

components of the program and recreating the total for transfer to the other 

system. Some examples of different types of U.S. agricultural policies and 

their placement in the two systems illustrate what can be involved (table 5).

Table 5

Examples of OECD and WTO classification of U.S. programs

U.S. program

Classification

WTO OECD

Commodity programs

Marketing Assistance Loan Program AMS, product-specific support PSE, support based on commodity

output (output payments)

Countercyclical payments AMS, nonproduct-specific support PSE, A/An/R/I (non-current, production

not required)

Environmental programs

Conservation Technical Assistance Green box, general services PSE, payments based on input use

(onfarm services)

Environmental Quality Incentives

Program Green box, environmental payments PSE, payments based on input use(fixed capital formation)

Conservation Reserve Program Green box, environmental payments

PSE, payments based on noncommodity criteria (long-term resource

retirement)

Other U.S. programs

Food Stamp Program Green box, domestic food aid

CSE, transfers from consumers to taxpayers (noncommodity-specific);

GSSE, marketing and promotion

(domestic food assistance programs)

Renewable Energy Program Green box, general services GSSE, infrastructure

Source: Economic Research Service, USDA, based on U.S. WTO domestic support notifications and OECD PSE/CSE database.
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Yet even when it is relatively easy to identify and translate programs from 

one measurement system to the other, a comprehensive understanding of an 

individual country’s policies and programs is needed to identify individual 

programs within each classification category and apply them appropriately in 

the other system. Moreover, the process is only possible for countries whose 

WTO notifications and OECD monitoring and evaluation data are reported 

transparently enough to identify these individual programs. Most importantly, some measures, such as MPS and other uniquely calculated indicators, 

cannot be directly translated from one system to the other and must be estimated for each system according to its own internal requirements to provide 

consistent and accurate measures. 
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