Is the Concept of the Producer Support Estimate in Need of Revision?

OECD’s Producer Support Estimate (PSE) is the only available source of internationally comparable information on support levels in agriculture. It attracts much attention and receives wide media coverage, not the least in reports that are critical of the way some agricultural policies are pursued. Interpretation of PSE results is not always in line with the underlying concepts, and often too narrowly focused on a few aggregate numbers. Against this background, the PSE approach as used by OECD has been criticized as providing potentially misleading information. This note deals with three central questions raised in such criticism.