Nominal Rate of Protection


The Nominal Rate of Protection (NRP) measures the extent to which a set of agricultural policies affects the market price of a commodity. It is computed as the price difference, expressed as a percentage, between the farm gate price received by producers and an undistorted reference price at the farm gate level. This indicator is not aimed to provide a holistic measurement of various agricultural policies, in contrast with the Producer Support Estimate (PSE) or the Nominal Rate of Assistance (NRA). It focuses only on the price implications of policies and will be larger for countries using price interventions compared to countries using farm subsidies. While applied to the production value evaluated at reference prices, the value of distortions is related to the market price support (MPS) metric.

This indicator being based on the difference between an observed farm gate price and a constructed reference price at farm gate level, it is sensitive to the assumptions and quality of information used in the construction of the reference price (exchange rate, quality and quantity adjustments, transportation and processing costs...). For detailed information regarding the computation of the reference price at farm gate and the market price difference (MPD), see OECD PSE Manual, Section 4.5.