US Farm Support Rises to Proposed Doha Ceiling
New data shows US
trade-distorting farm subsidies reached US$12 billion in the 2012 marketing
year – close to the US$14.5 billion ceiling that was proposed in the WTO’s 2008
draft Doha deal.
The figures, which Washington
reported to the WTO in December, also indicate that trade-distorting payments
fell slightly from the previous year, when they were above US$14 billion.
However, with many US subsidy
programmes tending to increase spending when prices fall, the 2012 data also
reflects the impact of the relatively high prices prevailing in the last seven
years.
Recent decreases in prices for
farm goods - along with new rules for support payments under the Farm Bill
legislation passed one year ago - could mean current subsidy spending levels
will be higher than those described in the latest figures, sources said.
Dairy, sugar, and wheat
Trade-distorting payments in
2012 were concentrated on dairy, sugar, and wheat, the new data shows.
Spending on these three
products accounted for a significant share of US spending in the WTO’s “amber
box” category - which for Washington is capped at US$19.1 billion under
commitments it has made at the global trade body.
The government provided US$3.4
billion in support to dairy, US$1.5 billion in support to sugar, and US$1.1
billion for wheat, the figures show.
Spending on cotton reportedly
represented US$636 million. Late last year, the US and Brazil reached an
agreement which concluded a long-running trade dispute over Washington’s farm
subsidies for this product.
Trade-distorting support for
other products brought US “amber box” support to nearly US$7 billion. Another
US$5 billion of trade-distorting “de minimis”
payments were not counted towards the current WTO ceiling for US farm support,
as they represent less than five percent of the value
of production for specific products, or below five percent
of total agricultural production in the case of non-product specific support.
However, both amber box and
“de minimis” payments would be disciplined under a
new category of overall trade-distorting support (OTDS) proposed in 2008 under
the WTO’s ongoing Doha Round negotiations.
The US has reported it made no
payments under a third category of production-limiting support - known as “blue
box” subsidies - which would also be included in the OTDS calculation under the
proposed new rules.
Mushrooming food aid
The US has also reported a
massive growth in payments that are classified as causing no more than minimal
trade distortion under WTO rules - dubbed “green box” support by trade
officials.
At US$127 billion, green box
support is now ten times the amount reported as trade-distorting payments.
Domestic food aid, to help US
citizens on low incomes purchase food, accounts for the lion’s share of support
reported to the global trade body.
Washington reported that
US$107 billion was spent in this category alone in 2012.
Another US$10 billion was
spent on “general services” – including extension and advisory services, animal
and plant health inspection services, agricultural research, and also
reimbursements for certain expenses incurred by insurance companies delivering
federal crop insurance.
Environmental programmes
accounted for US$5 billion, as did decoupled income support programmes – which
pay out subsidies to farmers irrespective of the volume or value of their
production.