DECOUPLING: A CONCEPTUAL OVERVIEW

Word decoupling has been used widely in both academic literature and the last one decade during between agricultural policy makers. But this solution is that the relative prices of time do not affect the meaning or produce agricultural commodities were of inputs. For policy makers and those involved in trade negotiations for agriculture in particular, often refers to the impact of decoupling one measure or set of measures, more specifically, a policy decoupled if it is not or only very little impact on production and trade. To be or not policies used by policy makers as decoupling concept of production and trade will provide modest impact departure point. By the discovery of different mechanisms - price and non price, static and dynamic - through which policies affect production and trade to make, this will analyze the word beyond more stringent economic meaning effort to discuss the impact static relative price uncertainty and to include longerterm dynamic effects.

Although decoupling did not use the word, was built in 1987 OECD Ministerial Releases OECD countries committed to the improvement of agricultural policy the long-term objective is to influence the process through market signals to allow a progressive and substantial reduction in support agriculture as well as in all other appropriate means, orientation of agricultural production. It used to, however, was directly OECD Agriculture Ministers Releases 1998 when, for a set of agreed criteria operations, they policy measures should be ... Confirmed ... targeted and specific results as possible decoupled away.

Uruguay Round Agreement on Agriculture (URAA), the sign of the country stated as its domestic support agreed to reduce compromise. However. Allows for exceptions to this commitment measures which conform to standards set out in Annex II. These measures (so-called green boxsupport is excluded from gross measures (AIIMS) and not for, or at least is the most important trade - distorting effects on production impact or. More specific criteria applicable to a wide range of different policy measures described in the attachment.

Actually, the word URAA text is applied to only one decoupled specific policy classes, ie income support decoupled. However, decoupling clean, or more lower embedded in the idea, trade - distorting effects or effects on production. Since the business of production and consumption be equal to 1, the difference between one fully either decoupled policy should not affect production or consumption decisions. This is why agricultural support policies decoupling is an issue for third countries and multilateral negotiations has become an issue. Theoretically, a business one fully decoupled policy have spread across the country should overs limit (few, if any, policies that in practice at all, although there are no effect on production or business). Policies that are completely decoupled countries over trade has spread, a countrys concern about another countrys policy Decoupling the issue of least least three dimensions are relevant:

- including a theoretical way to understand the agricultural policies dimensions affect potential production and trade.

- An empirical measure for the size of production and related dimensions impact of various trade policies. Production and trade of most empirical study only theoretical part focused on the impact of policies .

- Define a regulator to best practice policies or policy with the objective dimension the decoupled design packages.

Much effort already has been spent in search of these dimensions both directly and indirectly in OECD and elsewhere. Recent reclassification Producer Support Estimate (PSE) measures according to how the criteria for implementation more information about the policies needed for their production and trade shows a condition for the analysis of is implemented as effect. The pilot project is further empirical investigation and PEM production, consumption and trade efforts to quantify the relative price impact dimension through a series of specific measures the impact of a series PSU components caused by changes (OECD, 1999a). Much regulatory or best practicein the body of work with the objective dimension is introduced . Studies on the direct payments (OECD, 1994) is included, which, general criteria for direct payments is defined at least Besides production and trade effects, it is good practice for aimed at specific purposes identified design of payment. These were ,

(a) environmental performance,
(b) the minimum income support
(c) offsetting price and income volatility and
(d) to promote structural adjustment .

In addition, currently running several projects in the context of the 1999-2000 work program clearly relevant to common questions of decoupling. A study in agricultural environment, particularly measures that distort trade to the minimum standards in the Work multifunctionality, the policy effects of joint production relationships, when they are present, (OECD, 2001a) are analyzed. Further analysis of the notion clearly decoupling is important in terms of annual monitoring and evaluation exercises the development and evaluation in support against the trade policies and standards in the domestic - and particularly the market orientation, Targeting - theories arising from the various Ministerial agricultural policy reform.

To date, however, is extensive theoretical neglected dimension. So the first shot up and down the present aim to strengthen and complement other research efforts have already begun to do. agricultural policies has become more complex as, there is some relative prices affect outputs in the public sector, namely (steps away from the words movement away from market price support). As a result, it has become important production and trade identify all potential sources clear agricultural policies motivated by the decoupling effect.

Decoupling effects of the analysis focus on the production of Policy tools or policy packages focused . Welfare for the purpose of analysis is not possible implications.2 source of many potential loss or profit associated with agricultural policy package, including loss anyway when inefficient production, has maintained the policy implementation to transaction costs, externalities.4 benefit from taxes3 and potential production and trade related costs not we focus our attention on the effects of policies on associated welfare effects. Interestingly, these issues are dealt with OECD and other is in progress, but which are still beyond the scope of this paper . And generally, the paper check is not normal economic distortions. The objective is looking at policy measures only the angle their agricultural production and trade effects.

Correctly analyzed the concept of decoupling, policies already in place be borne in mind should be. Despite reforms some countries agricultural policies, OECD estimated 68% of cooperation by the producer countries in 1999 as market price support (OECD, 2000b) was, 78% below 1986 at -88. PSU as per OECD was completed in one 40% (OECD, 2000b). These member countries, despite the vast gap between the world market statistics are significantly distorted agricultural policy measures . Therefore, the impact of any policy changes should be analyzed in one context already many who believe that the status quo, current policies affecting.

Held in this paper such as is. Definition of appropriate is examined in section decoupling 2. Impact of production and trade with certainly in a stable world policies studied in Section 3 and Section 4 are, production focus is placed on the effects of trade policies and presence of risk . Dynamic effects on production and trade are considered . Relative impact on production and trade studies in a stable price structure , remain in effect when the risks are selling or dynamic analysis. That is, cumulative effects, and these channels are not optional .