Policy Analysis Matrix (PAM)

The Policy Analysis Matrix (PAM) is a tool used to evaluate the economic performance of an agricultural activity or industry by comparing its actual practice with potential or ideal scenarios. It considers costs, revenues, and policies affecting the activity, helping identify how policies, like subsidies or tariffs, impact profitability. By analyzing both private and social (societal) perspectives, PAM helps policymakers and stakeholders understand the economic effects of policies, guiding decisions to improve efficiency, competitiveness, and sustainability in agriculture.