시장가격지지(MPS) 추정대상품목 확대를 통한 OECD 농업생산자지지추정치(PSE) 개선 방안

An Appropriate Way to Calculate the OECD’s %PSE of Korea by Expanding the Coverage of MPS Commodities

This paper suggests an appropriate way to estimate the OECD’s %PSE of Korea by expanding the coverage of Market Price Support(MPS) commodities. Currently only 11 commodities are included in the MPS calculation and the share of included commodities in total value of agricultural production is only 54 percent which is very below the average of OECD members. Particularly considering the national total Market Price Support(MPS) calculated by extrapolation method which is to apply the same rate of Market Price Support to commodities excluded in calculating the Market Price Support, the MPS commodities must represent a significant share of the total value of agricultural production in order to reduce the associated estimation error. Therefore, OECD has recommended to increase the coverage of MPS commodities to more than 70 percent of total value of agricultural production so as to reduce the error of national total market price support. In this regard, the study analyzes the effects of increase in the coverage of MPS commodities on %PSE of Korea. Introducing more standard commodities for calculating the MPS may decrease the overall %PSE of Korea. In the case of including 10 major products as new coverage of Market Price Support, the %PSE of Korea could be reduced by 0.36～4.19% points. Furthermore, the %PSE of Korea could be greatly decreased by 4.0 3～8.08% points if we only include seven exporting products as new coverage of Market Price Support. In other words, there is a sufficient possibility to adjust the current high %PSE of Korea if an appropriate expansion of the product coverage of market price support could be made.