Regular review of members' agricultural policies
Members reviewed farm policies relating to the three pillars of agriculture trade: market access, domestic support and export competition. Six new issues were raised concerning agriculture programmes, policies and restrictions in Argentina, China, Turkey and the United States.
Argentina responded to questions on the use of exchange rate and inflation adjustment in its domestic support calculations. China explained a one-off payment reportedly worth USD 3.1 billion to help farmers cover the rising cost of production inputs, including subsidies for diesel and fertilizer. Turkey provided additional information regarding its export restrictions on pasta. The United States explained how it will execute the US Department of Agriculture's plan to invest USD 1 billion to “purchase healthy food for food secure Americans and build food bank capacity” and improve the functioning of its “marketing services programme”.
Fifteen issues raised in previous committee meetings were picked up again by members, notably Argentina's export restrictions on beef, Canada's new milk ingredient class, the EU's environmental policies, India's pulse policies and wheat and rice stockpiling programmes and the US farm support in response to the pandemic.
Questions were raised to seek clarity on members' notifications regarding tariff quota administration, special agricultural safeguards, domestic support and export subsidy notifications. Most of the questions focused on members' notifications on domestic support, with 13 members quizzed on their domestic support notifications to the WTO.
All questions submitted for the meeting are available in G/AG/W/213. All questions and replies received are available on the WTO's Agriculture Information Management System (AG IMS).
Bali TRQ underfill mechanism
The Bali Tariff Rate Quota (TRQ) Decision was discussed, with the focus on the future operation of paragraph 4 of the underfill mechanism, for which there was no agreement among members during the 2017-19 review of the implementation of the Bali TRQ decision. As per the agreed recommendations of the review approved by the General Council in 2019, the deadline to reach an agreement on this outstanding issue is the end of 2021.
TRQs allow import quantities inside a quota to be charged lower duties than those outside. The mechanism was agreed to as a means of allowing exporters to address their concerns on quota utilization related to burdensome TRQ administration arrangements. The underfill mechanism deals with cases when the fill rate of a TRQ in any given year is below 65% or the fill rate is not notified. In the absence of an improvement in the fill rate or a satisfactory resolution of the concern, the importing WTO member may be required to change the management of its TRQs.
Paragraph 4 of the mechanism concerns its “final stage”, which may be triggered if the three initial stages of engagement between the importing member and the exporting members remain inconclusive. The key outstanding issue on paragraph 4 is how to arrive at “closure” on an underfill for a developing importing member which does not achieve the required increase in the fill rate in the final stage of the mechanism. Several members extended their support for a proposal by one member which would ensure that the concerned underfill raised under the mechanism would reach a resolution.
A new issue involving a possible “conflict” between the underfill mechanism provisions and members' schedules of commitments also formed part of the conversation among members.
The chair, Mr Marcos Da Rosa Uranga (Uruguay), noted some members' request for more time to deliberate on the future operation of paragraph 4. He announced the suspension of the agenda item, with a view to reconvening when members are in a position to take a final decision. He plans to organize consultations in varying formats in the coming days, in the hope of galvanizing momentum and facilitating convergence before the year-end deadline.
Follow-up on the Nairobi Decision on export competition
Members discussed the second triennial review of the Nairobi Export Competition Decision. The decision commits WTO members to eliminate farm subsidies contingent on export. This was described by the WTO Director-General at the time as the most significant outcome on agriculture since the WTO was established in 1995.
As several export competition issues are currently being discussed, with a possible outcome at the 12th Ministerial Conference (MC12) in late November, the chair said that the second triennial review would be concluded at the next committee meeting scheduled for March 2022. He also noted that the nine main items identified by the former chair and included in annexes 3 and 4 of G/AG/R/99 constituted a good summary of membrs' discussions so far.
Members undertook the 2021 annual dedicated discussion on export competition to monitor the implementation of the Nairobi Decision. The chair noted that 2021 is the first year that all members are required to reply to the export competition questionnaire following the expiry of the grace period for developing members stipulated in the Nairobi decision.
The chair thanked the 33 members (counting the European Union as one) who have submitted their replies, including four developing members replying for the first time. He urged all members to fulfil their obligations while acknowledging the difficulties encountered by some members.
All the submissions to the questionnaire are compiled in the WTO Secretariat's G/AG/W/125/Rev.14 and its four addenda circulated on 14 July 2021. Several members answered questions at the meeting regarding their policies on export competition. These questions may be consulted in G/AG/W/213. All questions and replies received are available in the WTO's Agriculture Information Management System (AG IMS).
There has been no change since the last committee meeting regarding members incorporating the elimination of export subsidies into their WTO schedules of commitments. Among the 16 members with export subsidy reduction commitments, 12 have seen their revised schedules certified (i.e. accepted by all WTO members) while two members — Canada and the EU — await certification of their draft schedules circulated in 2017. Brazil and Venezuela have not yet circulated their revised schedules.
Brazil said its draft schedule would be circulated after the release of the presidential decree approving the Nairobi Decision. It assured members that no export subsidies are currently being provided for agriculture products. Venezuela said the pandemic has delayed the process of modifying its schedule. However, as a net-food importer, it could continue to benefit from the provisions of Article 9.4 of the Agreement on Agriculture on export subsidies under the Nairobi Decision until the end of 2030.
COVID-19 and agriculture
Members continued to discuss the COVID-19 pandemic's impact on agriculture. This has become a standing item of committee meetings since September 2020. The EU presented the fifth update of its ad hoc report on COVID-related measures, underlining that all the measures are being implemented at the national level.
The United Nations World Food Programme (WFP) () predicted that over 270 million people will be at risk of food insecurity in 2021 and 41 million people will be on the brink of famine (G/AG/GEN/190). To meet its humanitarian food aid objectives, the WFP needs global food supply chains to function smoothly, it said. The WFP thanked the 81 WTO members who signed up to a declaration vowing to exempt the WFP's humanitarian food purchases from export restrictions. It looked forward to an agreement on this issue at MC12.
The International Grains Council introduced its latest forecast for crop production and trade in 2021, pointing to record production and sufficient supply of main crops (G/AG/GEN/191). However, rising freight costs pose challenges to farmers and put upward pressure on crop prices.
The chair encouraged members to be transparent about their COVID-19 agricultural measures, including within the WTO's trade monitoring mechanism, to facilitate a collective assessment of these measures. COVID-19 agricultural measures reported under the trade monitoring exercise are hosted on a dedicated page on the WTO website. All ad hoc reports on members' COVID-19 measures have been compiled in G/AG/W/209/Rev.1.
Enhancing transparency in the committee
The chair underscored two elements regarding transparency in the committee: 1) timeliness and completeness of notifications submitted by members; and 2) the importance of timely and complete responses to questions raised in the review process. The chair encouraged members to redouble efforts to improve their compliance with notification obligations. G/AG/GEN/86/Rev.43, circulated on 8 September, reflects the current status of members' compliance with notification obligations. The chair expressed concerns on the large list of outstanding responses and urged members to reduce this list, including by utilizing the online response submission facility of the AGIMS.
Members approved the renewal of the ad hoc observer status for the Inter-American Institute for Cooperation on Agriculture for 2022.
The Secretariat announced its plan to hold the 2021/22 advance workshop on notifications in two phases.
On the sidelines of the committee meeting, the Organisation for Economic Co-operation and Development (OECD) introduced two new publications: “The Annual OECD-FAO Agricultural Outlook 2021-2031” and “OECD Agricultural policies monitoring and evaluation reports”.
The United Nations Food and Agriculture Organization presented a report entitled “Public food stockholding: a review of policies and practices”. The report looks at the basics of public stockholding, exploring the objectives of such programmes, the policy instruments used to achieve them and their possible market impacts.
The next Committee on Agriculture meeting is scheduled for 7-8 March 2022.
More information on the work of the Committee on Agriculture is available here.