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9TH WTO MINISTERIAL CONFERENCE, BALI, 2013: BRIEFING NOTES — AGRICULTURE (2)

Briefing note: Agriculture: implementing the current agreed reforms

Agriculture is a sector that members have agreed to reform: it is distorted by subsidies and high trade barriers, affecting access to food, fibres for clothing and other materials, and the livelihoods of farmers around the world. More recently, high prices and food security have come to the fore, and countriesĺ responses have to these sometimes caused concerns.

Updated: November 2013

THIS EXPLANATION is designed to help the public understand developments in the WTO. While every effort has been made to ensure the contents are accurate, it does not prejudice member governments’ positions.

Ministerial Conferences
> Bali Ministerial Conference
> Other briefing notes
> Note on agriculture negotiations

In the WTO, agriculture excludes forestry and fisheries products, but includes a number of processed foods and drinks.

The first major reform was the result of the 1986–94 Uruguay Round negotiations, which produced the present Agriculture Agreement. In it, governments started to close agricultural loopholes in WTO agreements by binding and cutting tariffs, removing import bans or restrictions, and cutting subsidies that distort trade, both in domestic markets and on exports. Poorer countries are allowed more lenient terms, and least developed countries have not made any reduction commitments.

Negotiations since 2000 — brought into the Doha Development Agenda in 2001 — aim to continue the reform. (See separate briefing note)
  

Some current issues

The routine work in agriculture is handled in the “regular” Agriculture Committee, as distinct from “special sessions”, which are for the negotiations. But the regular meetings and the negotiations are not entirely separate.

Firstly, the regular committee is an extension of previous negotiations. Its role is to monitor how the reforms under the present agreement are being implemented and what the impact is. Without this type of follow up, the negotiations would be pointless.

Secondly, some discussions in the regular committee provide the background for some of the issues currently being negotiated.


Are countries keeping their promises?
One of the regular Agriculture Committee’s responsibilities is to monitor whether members are keeping the promises on subsidies and market access that they made as a result of the 1986–94 Uruguay Round negotiations (or their membership deals if they joined the WTO later) and to discuss issues that arise.

Many of the questions and answers that come up in the committee’s discussions are about getting more information and explanations, but they can and do also deal with breaches of commitments. Airing these concerns in the committee can avoid full-blown legal disputes, as in the case of Costa Rica, which has exceeded its domestic support limits for rice for several years but has now announced that it will bring its support into line in 2014.

More: the March 2013 committee meeting, and the latest on how up-to-date members are on supplying information


Can one country’s stockpiling hurt another’s farmers?
One of the policies that many governments use to deal with food insecurity is to build up stocks. The policies can differ, and some have triggered discussions in the regular committee, particularly when government stockpiling programmes are linked to support for farmers’ incomes. The concerns relate to the potential market effects on other countries and world markets in general.

In the regular committee’s September 2013 meeting, members raised concerns raised were particularly about stockholding of rice in Thailand and India, wheat in India, and soybeans and other products in Indonesia. (They also discussed cotton stockpiles in China, with similar concerns about the effect on market, although this is not about food.)

Members expressed concern for “systemic” reasons — whether countries would breach their commitments and when they were going to share information on their programmes — and about the impact on market prices when the stocks are released. Pakistan said it was particularly concerned because it has millions of rice farmers who do not receive subsidies but could be affected by rice stocks released by other countries.

The debate provides some of the background to the negotiations on developing countries’ stockpiling and food aid in the lead up to the Bali Ministerial Conference.


Is it acceptable to restrict exports?
When food becomes expensive or is in short supply, some countries restrict exports in order to maintain a supply for the domestic market and to prevent excessive rises in domestic prices rising. However, this is a concern for countries that rely on imports: their own food security can suffer if exporters withhold supplies.

This issue has arisen periodically in the regular Agriculture Committee, for example, in June 2011, November 2011, and November 2012.

Under WTO rules, countries can restrict exports of agricultural products but only temporarily and they have to comply with GATT Article XI (ie, 11), in this case paragraph 2(a), and with Article 12 of the Agriculture Agreement.

These require the restricting country to take into account the impact on importing countries’ food security, to notify the WTO as soon as possible, and as far in advance as possible, to be prepared to discuss the restriction with importing countries and to supply them with detailed information when asked for it.

See also: www.wto.org/foodsecurity

 

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 Jargon buster 

Place the cursor over a term to see its definition:

• Amber box

• Blue box

• de minimis

• Green box

• notification

• overall trade-distorting domestic support (OTDS)

• tariff quota

> More jargon: glossary


 In numbers

World agricultural trade (2012)
= $1,656.7bn,
= 9% of goods trade

Top 10.
$ billion, and
% shares of agricultural trade

Exporters:
• US — 171.9 (10.4%)
• EU (27) — 162.9 (9.8%)
• Brazil — 86.4 (5.2%)
• China — 66.2 (4.0%)
• Canada — 62.8 (3.8%)
• Indonesia — 45.0 (2.7%)
• Argentina — 43.2 (2.6%)
• India — 42.4 (2.6%)
• Thailand — 42.0 (2.5%)
• Australia — 38.4 (2.3%)
• Malaysia — 33.9 (2.0%)

  
Importers:

• EU (27) — 173.2 (9.9%)
• China — 156.8 (9.0%)
• US — 141.8 (8.1%)
• Japan — 93.7 (5.4%)
• Russia — 42.0 (2.4%)
• Canada — 37.9 (2.2%)
• Rep. Korea — 33.1 (1.9%)
• Saudi Arabia — 29.3 (1.7%)
• Mexico — 27.1 (1.6%)
• India — 25.7 (1.5%)

More: agricultural trade (pdf),
all commodities (pdf), International Trade Statistics 2013