Farm policy reforms: what might they mean for the WTO?

30 September 2013

GENEVA, SWITZERLAND - Agricultural markets and farm policies have changed significantly since the WTO's Doha Round was launched at the turn of the century. Last week ICTSD and the FAO held a joint event to look at how these changes could affect trade, food security and environmental sustainability - and what governments might be able to do about them.

The EU's CAP reform, the US Farm Bill and Russia's State Program for Agricultural Development will together play a major part in shaping the agricultural trade landscape in years ahead. Similarly, developing country initiatives such as farm subsidies under China's 'san nong' programme, India's new Food Security Bill or Brazil's Fome Zero scheme could also affect not just agricultural trade but also the achievement of public policy goals such as tackling poverty and hunger, or boosting farm productivity.

Meanwhile, markets for food and agriculture have been characterised since 2006 by higher and more volatile prices - which experts at the FAO and OECD project will continue in years to come. Many poor net food-importing countries are worried that future price spikes could adversely affect vulnerable consumers - especially if trade-related policies like farm export restrictions push prices higher.

New challenges - such as the growing use of agricultural products for energy - have created much stronger links between agricultural and energy markets. However, WTO members have barely begun to deal meaningfully with these challenges, or with other developments such as climate change.

In part because of the impasse in multilateral trade talks, some countries are now investing considerable resources in bilateral and regional negotiations. In some cases though, scepticism remains about how much further integration can reasonably be achieved between trading partners that may already have substantially liberalised trade between themselves. Furthermore, a range of policy actors acknowledge that progress on many thorny topics, such as farm subsidies, can only realistically be achieved through negotiations at the multilateral level.

The new energy in WTO trade talks in the run-up to the global trade body's ministerial conference this December in Bali may be cause for cautious optimism. Negotiators are at last engaging in intensive negotiations over specific trade topics, including on agriculture. However, the ambition of the Bali 'small package' is - by definition - far more limited than the original scope of the Doha Round of trade talks. It is also far smaller still than the much broader agenda of issues that governments will have to engage with effectively if they are to respond to the challenges of today's world.

Building an equitable and more sustainable agricultural trading system will not be done overnight. The first task is to rebuild trust among governments. However, negotiators could take a meaningful first step towards this at the Bali ministerial conference, by agreeing to address trade and food security in a comprehensive way as part of a post-Bali agenda. A formalised work programme, focusing in particular on the new challenges countries now face, could be one way to achieve this.

Jonathan Hepburn is Agriculture Programme Manager at ICTSD

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