Disciplining Agricultural Support Through Decoupling

"Agricultural protection, particularly in high income countries, have induced overproduction, thereby depressing world commodity prices and reducing export shares of countries which do not support agriculture. One-and perhaps the only-effective way to bring a socially acceptable and politically feasible reform is to replace payments linked to current production levels, input use, and prices by payments which are decoupled from these measures. Overall, the experience with decoupling agricultural support has been mixed while the switch to less distortive support has been uneven across commodities and countries. Rules have changed with new decoupling programs added so expectations about future policies affect current production decisions. Time limits were not implemented and if so, were overruled. Ideally, compensation programs would be universal (open to all sectors in the economy, not just agriculture) or at least non-sector-specific within agriculture. A simple and minimally distorting scheme would be a one-time unconditional payment to everyone engaged in farming or deemed in need of compensation that is nontransferable, along the lines of one-time buyouts without remaining subsidies. To maintain government credibility and reduce uncertainty, eligibility rules need to be clearly defined and not allowed to change. The time period on which payments are based, the level of payments, and the sectors covered should all remain fixed. Support to specific sectors within agriculture should be in the form of taxpayer-funded payments. There should be no requirement of production. Land, labor, and any other input should not have to be in "agricultural use." "--World Bank web site.

Agricultural protection, particularly in high income countries, have induced overproduction, thereby depressing world commodity prices and reducing export shares of countries which do not support agriculture. One-and perhaps the only-effective way to bring a socially acceptable and politically feasible reform is to replace payments linked to current production levels, input use, and prices by payments which are decoupled from these measures. Overall, the experience with decoupling agricultural support has been mixed while the switch to less distortive support has been uneven across commodities and countries. Rules have changed with new decoupling programs added so expectations about future policies affect current production decisions. Time limits were not implemented and if so, were overruled. Ideally, compensation programs would be universal (open to all sectors in the economy, not just agriculture) or at least non-sector-specific within agriculture. A simple and minimally distorting scheme would be a one-time unconditional payment to everyone engaged in farming or deemed in need of compensation that is nontransferable, along the lines of one-time buyouts without remaining subsidies. To maintain government credibility and reduce uncertainty, eligibility rules need to be clearly defined and not allowed to change. The time period on which payments are based, the level of payments, and the sectors covered should all remain fixed. Support to specific sectors within agriculture should be in the form of taxpayer-funded payments. There should be no requirement of production. Land, labor, and any other input should not have to be in "agricultural use."

The Agreement on Agriculture (AoA) was adopted to eliminate the illegitimate use of trade distorting agricultural subsidies and, thereby, reduce and avoid the negative effects subsidies have on global agricultural trade. However, the AoA has been fashioned in a way that is enabling developed countries to continue high levels of protectionism through subsidization, whilst many developing countries are facing severe and often damaging competition from imports artificially cheapened through subsidies. The regulation of subsidies by the World Trade Organisation (WTO) has been a highly sensitive issue. This is mainly due to the fear of compromising on food security, especially by developed countries. Developing countries have suffered negatively from the subsidy programmes of developed countries, which continue to subsidize their agricultural sector. This position of developing countries in the global trade system, which has been described as weak, has drawn criticism of the WTO, namely that it does not protect the interests of the weak developing nations, but rather strengthens the interests of the strong developed nations. The green box provisions which are specifically designed to regulate payments that are considered trade neutral or minimally trade distorting have grossly been manipulated by developed countries at the mercy of the AoA. Developed countries continue to provide trade distorting subsidies under the guise of green box support. This is defeating the aims and objectives of the AoA. The study examines the regulation of WTO agricultural subsidies from the developing countries’ perspective. It looks at the problems WTO member states face with trade distorting subsidies, but focuses more on the impact these have on developing states. It scrutinizes the AoA’s provisions regulating subsidies by adopting a perspective to identify any loopholes or shortcomings which undermine the interests and aspirations of developing countries. This is against the background that some of the provisions of the AoA are lenient towards the needs of developed countries at the expense of developing countries.

ÔThe range of topics covered in this volume is multi-faceted and various. . . Practitioners with clients involved in agri-business will be particularly interested in the broad spectrum of matters discussed, as will trade negotiators, policy advisors and graduate students in this vital and fascinating field.Õ Ð Phillip Taylor MBE and Elizabeth Taylor, The Barrister Magazine Agriculture has been the unruly horse of the GATT/WTO system for a long time and efforts to halter it are still ongoing. This Research Handbook focuses on aspects of agricultural production and trade policy that are recognized for their importance but are often kept out of the limelight, such as the implication of national and international agricultural production and trade policies on national food security, global climate change, and biotechnology. It provides a summary of the state of the WTO agriculture negotiations as well as the relevant jurisprudence, but also, and uniquely, it focuses on the new and emerging issues of agricultural trade law and policy that are rarely addressed in the existing literature. With contributions from a multi-disciplinary team of leading analysts from around the world, this Research Handbook will appeal to trade negotiators, international trade law and policy academics as well as postgraduate students in the field.

European Monographs Series, Volume 9 This second and much-revised edition of the pre-eminent work on European Union (EU) agricultural law emphasises the sweeping changes that have led to the gradual expansion of the common agricultural policy to encompass the food chain as a whole. Although the new edition’s purpose and methodology remain the same, the author presents a completely new overview of the field as it now exists, including the effects of the latest reform measures up to 2021 and their implications for the future. Imparting in-depth awareness of the multifunctional character of agriculture today – its importance for environmental protection, preservation of biodiversity, public health, mitigation of climate change, and rural development, as well as its international obligations – the book provides matchless insight and clarifications on such critical legal details as the following: analysis of the Green Deal, the Farm to Fork Strategy, and the Biodiversity Strategy for 2030; extensive treatment of the TFEU provisions on agriculture and the impact of international legal instruments; clear and easily accessible treatment of the legislation on market and price policy, competition, and the agri-food chain; thorough analysis of administrative law aspects, in particular, the rights and obligations of operators in the framework of numerous subsidy arrangements and related topics such as sanctions and force majeure; and in-depth treatment of the importance of the general principles of EU law for legal protection. Given that about one-third of the EU’s budget is spent on agriculture – and that European legislation on agriculture is voluminous and complicated and case law is abundant – this well-organised and lucid exposition will be of immeasurable value to any practitioner asked to deal with a case involving agriculture anywhere in the EU. Academics aware of the growing intricacy of the field will welcome the author’s reflections on the meaning and significance of EU agricultural law.

This volume offers a history of the negotiations for a new Agreement on Agriculture up to the end of 2010, from the mandated negotiations under Article 20 of that Agreement to the negotiations launched by the 2001 Doha Declaration.

This volume is the result of research and exchange activities within the European Network of Agricultural and Rural Policy Research Institutes (ENARPRI). It synthesizes various analyses related to EU agricultural policies, trade agreements, and the issue of multifunctionality. The book focuses on the impact of regional, bilateral, and multilateral trade agreements that the EU has concluded or is in the process of negotiating, as well as on the interaction between EU policies and trade agreements, in the context of multifunctionality and sustainable development. Most of the trade agreements examined are extremely complex and impact not only efficiency and growth, but also income and welfare distribution within the EU. Special attention is given to the effects of possible WTO negotiation outcomes on the EU and third countries, as well as on the impact of the EuroMed trade proposals and agreements on trade flows and economic development of the EU's trading partners in the Mediterranean.

Providing the most complete and up to date analysis of the range of agricultural issues under negotiation in the multilateral trade negotiations underway in the World Trade Organization (WTO), this title is a valuable resource to policymakers, agricultural private sector, and academics in developing and assessing the negotiating options.