Developing Countries Table Food Security Proposal at WTO

14 November 2012

The G-33 group of developing countries has tabled a new proposal on farm trade and food security, trade sources say, in a bid to fast-track elements of the draft Doha accord ahead of the WTO's ministerial meeting next year.

The group, which includes China, India, and other countries with a sizeable share of smallholder farmers, would like trade ministers to support more flexible rules for farm subsidies in the WTO's "green box" - those that are exempt from any ceiling or reduction commitments on the grounds that they cause not more than minimal trade distortion.

Negotiators told Bridges that the proposal has been circulated in advance of an informal meeting this Friday of the WTO's agriculture negotiations committee. The meeting was initially called to discuss two separate proposals from the G-20 developing country group, which favours reform of developed country farm policies. (See Bridges Weekly, 3 October 2012)

However, some officials warned that the G-33 proposal might be less likely to garner consensus than the G-20's initiative. "It might be seen as a slightly different beast," one negotiator cautioned.

"Low-income, resource-poor" farmers

The G-33 proposal, a copy of which has been seen by Bridges, calls for new rules on public stockholding for food security purposes and on domestic food aid. The group says that if a developing country government purchases food for its stocks at administered prices in order to support "low-income, resource-poor producers," they should not have to count this towards the aggregate measure of support they provide - an amount referred to as the ‘AMS' by trade negotiators, and capped for each country under WTO rules.

Similarly, if developing country governments acquire food for domestic food aid at subsidised prices, they should not have to count these towards their AMS ceiling, so long as the food was "procured generally" from low-income or resource-poor producers in developing countries.

The group also proposes that several kinds of developing country farm programmes should be exempt from any ceiling on subsidies by classing them with other green box programmes at the WTO. Policies and services related to farmer settlement, land reform programmes, rural development, and rural livelihood security in developing countries should be among them, the group said.

The three clauses are all taken unchanged from a part of the draft Doha agriculture text that members have tended to see as being close to consensus, subject to progress in the talks as a whole. However, the draft text itself has now been unchanged for four years as a result of the broader impasse in the talks.

Absent from the G-33 proposal were two elements - agricultural state trading enterprises, and international food aid - that had been included in an earlier draft prepared by India, which has taken the lead in pushing for the initiative at the WTO.

Market price support

Some delegates told Bridges that they expected the proposal to be controversial amongst the broader membership.

"Would countries be well served to open up the way to market price support in the green box?" asked another, who feared the proposal could "de-rail the whole build-up for MC9" - negotiators' shorthand for the upcoming ninth WTO ministerial conference next year.

Others suggested that, with the exception of some of the larger developing countries, many simply lacked the resources to support farmers in this way.

Proposals to expand significantly the current provision of subsidised food in India under the country's Food Security Bill had some negotiators particularly worried, while others expressed concern that surplus foodstocks were being exported. (See Bridges Weekly, 18 July 2012)

However, another negotiator from the group rejected this assessment. "Nobody is going to be hurt" by the proposal, the source said.

A problem of definition?

Negotiators observed that the term "low income or resource poor" producers has not been defined, even though it appears in both the WTO's current Agreement on Agriculture and the draft Doha accord.

However, one delegate pointed out that India's most recent official farm subsidy notification to the WTO states that 98.97 percent of farm holdings fell into this category. (See Bridges Weekly, 15 June 2011) A previous notification, for marketing year 1995-96, put the figure at 79.5 percent, and defined low-income resource-poor producers as those with operational land holdings of ten hectares or less.

In response to a question on the subject from the US, India also told a September meeting of the WTO's committee on agriculture that farmers are not allowed to have more than ten hectares of irrigated land.

Brazilian delegates told the same meeting that low income or resource poor farmers produce 22.9 percent of the value of agricultural production in their own country.

One negotiator expressed concern about the broader implications of the proposal. "How does this affect other countries?" the source asked.

A bumpy road to Bali

Trade officials have recently discussed whether the Bali ministerial could deliver a deal on easing customs administration and cutting time at border crossings - known as ‘trade facilitation' - perhaps accompanied by an agreement on the administration of import quotas for farm goods, as the G-20 have suggested.

In comments to Bridges, a G-33 official nonetheless argued that these two areas "are not seen as being enough" for a Bali package.

One developing country negotiator told Bridges that some countries did not want a Bali deal to include trade facilitation. "This is why they are bringing issues that won't succeed," claimed the source.

Others supported the view that the G-20 proposals were more likely to gain traction quickly among the broader WTO membership.

The G-33 proposal "will present a difficult challenge," one source cautiously observed.

ICTSD reporting.

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