The 11th Global Forum for Food and Agriculture (GFFA)
January 18, 2019
No legitimate government can be indifferent to agriculture, to its farmers, to the feeding of its people. It is because of this immutable fact that agriculture occupies an indispensable place in the WTO — the organization and rule book that 164 countries maintain for mutual and global benefit. Agriculture is a key priority of the WTO's members.
Agricultural negotiations stalled after the significant accomplishment at the Nairobi Ministerial in 2015 to ban export subsidies. Serious work is now being undertaken in the Committee on Agriculture in Special Session to prepare for the return to an active negotiating phase. This is being accomplished through briefings by experts and by Member submissions on the current realities of trade distorting measures, from tariffs to domestic support.
How well agricultural trade succeeds in enhancing the living standards of the world's peoples is a fundamental measure for judging the performance of the WTO. This is entirely in the hands of the WTO's members – in short, in the hands of responsible ministers. Leaders representing 80% of global GDP and three-quarters of world trade last month called for reform of the WTO. Agriculture cannot and should not be left behind. It will not remain untouched by any reform effort.
By the year 2050, world agricultural production must grow to feed an additional 1.3 billion people. In addition, agriculture must do its part to raise the living standards of billions of people, including the hundreds of millions still in extreme poverty. And it needs to accomplish this in the face of catastrophic climatic events and trends that in the near and medium term appear to be irreversible.
A substantial part of the answer to these challenges lies in the digital revolution, which is transforming global production and trade. The advent of cutting-edge new technologies makes it possible for farmers to produce more food in a sustainable manner with less inputs. Farmers and others in the agricultural value chain can now have access to data on seeds with the best yields, weather patterns, soil and crop conditions and pest prevalence and can as a result make pertinent production, marketing and financing decisions in real time.
Many Members are now at the threshold of beginning the negotiating phase on E-Commerce and other reform efforts are under active discussion. It is essential that agriculture not be left out. The digital revolution has already altered the shape of global manufacturing. Agriculture must now be allowed to obtain the full benefits of emerging digital and other technologies.
The Past as Prologue
Agriculture has always been a contentious issue at the GATT/WTO. During the GATT years, disciplines on agriculture were very weak, enabling countries to maintain high tariff walls, make extensive use of non-tariff barriers, grant trade-distorting support to their farmers and provide export subsidies to their exporters. The Agreement on Agriculture (AoA), a result of the Uruguay Round, was the first comprehensive effort to discipline trade-distorting practices in the sector.
With respect to market access, the AoA required the conversion of all non-tariff barriers to tariffs by members maintaining such measures and mandated that developed and developing countries reduce their tariffs on the average by 36% over six years and by 24% over ten years starting from 1995, respectively. Developed and developing countries had to make a minimum cut of 15% and 10% to each tariff line, respectively. Least-developed countries were exempted from reduction commitments.
Regarding domestic support, the AoA mandated that developed and developing countries reduce their Aggregate Measurement of Support by 20% over six years and by 13.3% over ten years, respectively. The de minimis entitlements for developed and developing countries to maintain trade distorting support were 5% and 10% of the value of production, respectively.
With regard to export competition, commitments were undertaken by Members with respect to the volume of subsidised exports and the level of expenditure. While developed countries committed to reduce the volume of their subsidised exports by 21% and the level of their expenditure by 36% over six years, developing countries undertook to reduce theirs by 14% and 24%, respectively over 10 years.
The results were impressive considering the laxity in the rules during the GATT years, but the results fell short of what the WTO Members thought should be achieved. For this reason, they committed themselves in the Agreement to further reform the agricultural trading system — to enhance competitiveness and to address the food security.
Negotiations began in earnest in 2000 under the auspices of the Committee on Agriculture in Special Session. The negotiations were then folded into the Doha Round when it commenced in 2001. The adoption of the Ministerial Decision in Nairobi in 2015 to eliminate export subsidies and measures having equivalent effect and the Bali Decision on Public Stockholding in 2013, represented progress, but much remains to be done in the fields of domestic support and market access.
At the Buenos Aires Ministerial Conference in December 2017, Members did not come to an agreement on a permanent solution for the public stockholding for food security purposes nor did they adopt an overall work programme to guide further negotiations. Members did vow to press ahead with agricultural reform on the basis of Article 20 of the AoA and other Ministerial mandates.
The Road Ahead
The Status of WTO Agricultural Negotiations
The negotiations were like a car that has been driven off the road into heavy snow and got stuck. This is what happened in 2008, the eighth year into the Doha Development Agenda negotiations. In subsequent years, the tendency has been to step on the gas only to have the wheels spin in place with no general movement (with the two exceptions noted previously). This was due to linkages that members make to different areas within and outside agriculture and changes in the realities of trade, who used domestic support, how much, in what form, which barriers were lowered autonomously (without reciprocity) or in free trade agreements, and the like. The world had moved on. Some said the earlier round of negotiations was to be declared dead, others said that it should be restarted. It became a mix of both, with little forward movement. And there were no broad major WTO negotiations to pull the car out of the ditch.
Since the appointment in April 2018 of Ambassador John Deep Ford of Guyana as Chairman of the Committee on Agriculture in Special Session, there has been a burst of activity in the Committee. Members have been engaged in fact-based discussions to determine the evolution and trends in all types of support provided by Members as well as the real barriers to market access. Some 18 papers have been tabled my members establishing a factual predicate that would be necessary to restart negotiations. Some of the papers are very detailed on tariff structure, special safeguards and domestic support programs. Generally, a comparison is included in these papers with existing WTO commitments. An emphasis has also been put on enhanced transparency with a view to Members fulfilling their notification obligations. The recent submission by China of its domestic support notifications through the year 2016 is a step in the right direction.
The ground is being prepared to enable negotiations to resume in the coming months. To assist the process, the Chair intends to create seven Working Groups on the negotiating topics (domestic support, public stockholding (PSH), market access, special safeguard mechanism (SSM), export competition, export restrictions and cotton), which would be led by Members. Going back to our metaphor of the automobile stuck in a snow back, rather than passengers urging demanding that the accelerator to be pressed or the breaks to be hit – all of which would be useless, or just pulling the steering wheel one way or another (making competing and incompatible demands of other members), the attempt being made is to put enough grit (facts) under the wheels to gain traction. This is a very positive and sensible development.
The working group process is expected to feed into the overall negotiating process in the Committee on Agriculture in Special Session. It is the intention of the Chair to have a package of reform measures that could be adopted by Ministers at the Astana Ministerial Conference, which is scheduled to take place in June 2020.
ICT for Agriculture
With respect to digitalization of agriculture, many of the interests of agriculture ministers will need to be addressed at the national and regional levels and at the WTO. At the WTO, most likely these questions will arise in groups other than the Committee on Agriculture in Special Session. The digital revolution is central to the future of agriculture, but to my knowledge it is not being addressed in a systematic way, at least not in terms of what is needed at the multilateral level.
About two decades ago, I am told, France Telecom invested in cell phone service in Senegal, giving current market price information to fishermen. This dramatically increased the returns that they could realize. Similar effects were experienced in the grain market in Niger and for the banana farmers in Uganda.
Going forward, ICT — digitalization for agriculture — holds enormous possibilities. But to take advantage of the benefits, national regulations and international commitments will need to be adjusted. Agriculture ministers are likely to face a new range of serious questions:
- Do your farmers have assured access to foreign agricultural search engines and mobile apps that permit them to gain access to information on the best seeds and other inputs available worldwide suited for their soil and climate conditions.
- Knowing what is available is an initial step to support smarter farming.
- Can companies located anywhere gather sufficient local data to provide meaningful search results?
- Is there guaranteed access to express delivery services for local farmers to avail themselves of the fruits of their search for inputs and equipment?
- Are there zero tariffs on imports of equipment needed for local farmers to take advantage of the tools needed for digitalization?
- There was to have been a review of the coverage of the Information Technology Agreement in 2018. It did not take place.
- If merchandise is involved, has the Trade Facilitation Agreement been fully implemented? Are barriers at the border sufficiently reduced to make cross border transactions feasible (for small holders in particular)?
- Can crop insurance supported by local data be supplied from outside the borders of your country?
- "20,000 farms in Ghana, Kenya and Uganda, have access to simple and affordable crop insurance via their smart phones". The contracts are based on blockchain, distributed ledger technologies. The pay-out is immediate if there are a number of days of drought detected by high resolution satellite images to detect rainfall and plant growth.
- An Australian firm rents robots for field work, enabling the reduction of inputs, including herbicides, pesticides and fertilizer. Mobile computing, sensors and artificial intelligence are employed. Can these rentals take place cross-border in your country? Are their tariffs or nontariff barriers to be cleared? Can the instructions for the machines to adapt to local conditions flow across borders electronically? Can the data be gathered to improve local use?
Recent developments with respect to agriculture digitalization include the following examples:
- A foreign non-profit uses text messaging to assist farmers in Kenya to judge how much lime to use to fight soil acidity. By including reminders about planting and weeding schedules, sugar cane yields are said to be up by over 10%.
- A start-up in Nigeria uses vast amounts of data to provide crop prices and crowd-funding for raising capital. A similar service is offered in Ghana.
- Nairobi-based start-ups provide affordable irrigation systems and solar powered cold storage units.
- In Cameroon and in other countries, ICT services provide live pricing data to assist in marketing.(1)
- The Internet of Things enables monitoring of the performance of machinery and systems to provide information necessary for adjustment and maintenance of equipment.
- Trust is a growing basis for extension of credit, built on the accumulation of data on each individual purchaser. Blockchain technologies enable supply chain management, track products for food safety, enhance information for marketing, as well as facilitating finance (including payments and insurance).(2)
- The international marketing of apps depends in part on intellectual property rights being respected. Are they sufficient and enforceable in your country?
National regulations need to be examined to determine if they support or deter the deployment of advances of digitally-based tools for agriculture. There is no substitute for the multilateral trading system being adapted to provide enough certainty for farmers to rely on foreign suppliers and foreign markets, and for suppliers to invest in providing support to farmers in other countries. The trading system has to provide a sufficiently reliable framework to enable digitalization to pave the road to smart farming.
First: Profound care should be taken to ensure that regulatory systems enacted by governments facilitate innovation and do not stifle progress.
Second: Urgent action is needed to address distortions caused by unjustified domestic subsidies and the maintenance of tariff and non-tariff barriers by WTO Members. This is critical to ensure a fair, efficient and sustainable market-oriented trading system that contribute to the realization of the Sustainable Development Goals.
Third. To break the deadlock and inject dynamism into the global agricultural market, all WTO Members must increase their engagement and exercise flexibility to accommodate others' interests. An attitude of "mine before yours" is not going to work. Understanding the interests of others is essential to finding mutually acceptable solutions. Hardening negotiating positions at this critical juncture would prevent progress and hamper efforts to have a robust, competitive agricultural sector.
Fourth: The role of agriculture ministers in the negotiations is vitally important. I encourage you to work closely with your trade counterparts to come up with proposals that facilitate substantive progress in the agriculture negotiations. It is vitally important that you assure that international rules permit the entire agricultural value chain — from farmer to the consumer — is able to take advantage of emerging new technologies.
The 11th Global Forum for Food and Agriculture (GFFA)
17-19 January 2019
"Agriculture Goes Digital – Smart Solutions for Future Farming”
Alan Wm. Wolff
Deputy Director General, WTO
At Closing of Meeting of Ministers
My thanks to Minister Julia Klöckner and her Ministry for her and its gracious hosting of this 11th Agriculture Ministers' Summit.
There are three main ways in which to meet the twin challenges of feeding a global population that is projected to increase to 9 billion people by 2050 and the effects of climate change in a sustainable manner, consistent with preserving the environment:
First: The right of farmers to the best available information and technology should be preserved and not compromised. Regulatory frameworks should support digitalization without introducing obstacles which would compromise access to new technologies. In the context of reform of the WTO rules, the rights of farmers and those engaged in agriculture to the fruits of the digital revolution should be assured.
Second: Trade distortions, particularly in the form of subsidies, must be reduced or eliminated so as not to undermine the potential benefits of digitalization. The involvement by Ministers of Agriculture together with their trade counterparts is needed to inject dynamism into WTO negotiations aimed at accomplishing this objective. Optimal outcomes would support the growth and competitiveness of the agricultural sector across the world and result in increased farmers' incomes.
Third: Smart solutions must include increased trade. Trade makes food more affordable by allowing it to flow from where it is efficiently produced and in abundance to where it is needed. WTO Members are focused on disciplining border measures such as high tariffs and export restrictions. In addition, in Buenos Aires, in December 2017, a critical mass of WTO Members launched initiatives on e-commerce, investment facilitation, and micro and medium and small enterprises (MSMEs), all of which are relevant to today's topic and audience.
The WTO will be a reliable partner given our shared commitment of making nutritious and affordable food available to all, while preserving the environment.
- Most of the examples are taken from recent articles in the Financial Times. Back to text
- Tripoli, M. & Schmidhuber, J. 2018. Emerging Opportunities for the Application of Blockchain in the Agri-food Industry. FAO and ICTSD: Rome and Geneva. Licence: CC BY-NC-SA 3.0 IGO. See also Information and Communication Technology (ICT) in Agriculture, A Report to the G20 Agricultural DeputiesPrepared by Food and Agriculture Organization of the United Nations (FAO) with inputs from International Food Policy Research Institute (IFPRI), Organization of Economic Cooperation and Development (OECD). Food and Agriculture Organization of the United Nations, Rome, 2017. Back to text