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Agriculture

A blueprint for reform of the WTO Agreement on Agriculture

Are current agricultural policies efficient in achieving WTO developmental objectives?

Authors: V. Zahrnt
Publisher: European centre for international political economy, 2009

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As the Doha negotiations are at a dead end, this paper takes a step back to address the future direction of WTO disciplines in agriculture. The paper argues for moving from the current "boxes" of domestic subsidies to a classification system that is more responsive to the differing degree of legitimacy of agricultural policy instruments. It also proposes to introduce "good governance" norms that guide members’ decision-making in agriculture towards policies that are at the same time domestically efficient and internationally responsible.

The paper finds that the overwhelming majority of current agricultural policies are not efficient in improving global wealth, and raising and stabilising the real income of below-average income households. Nevertheless, they are actually detrimental to many of such objectives. Thus, the paper suggests the following actions:

  • main policy instruments (tariffs, export subsidies, and coupled payments) should be eliminated
  • in terms of WTO boxes, the Amber and the Blue Box should be abolished. The Green Box should be modified
  • for the remaining measures, eligibility criteria should be elaborated in more detail
In addition, the paper believes that members should establish an independent review body to conduct cost-benefit evaluations, and develop or at least verify its country’s WTO support notifications.

The paper concludes that the deadlock of the Doha Round offers an opportunity to go beyond the inherited framework and to engage in some creative thinking. The central idea should be that trade-friendly agricultural policies are, at the same time, efficient in attaining domestic objectives.