US Farm Support Still Largely Food Stamps, New Data Shows

Payments that help poor households buy food continued to make up the bulk of US agriculture spending in 2011, according to new US data submitted to the WTO last week. Forms of support believed to be most trade-distorting were at their third-lowest levels in over a decade.

With the total notified support standing at US$139 billion, nearly US$103 billion went to schemes such as the Supplemental Nutrition Assistance Program (SNAP), better known as food stamps. With the economic recovery still rocky, many in 2011 faced unemployment and poverty, leading them to lean more on the social safety net.

The scale and size of the food stamp programme has been one of the most contentious topics in Washington lawmakers’ ongoing attempts to design a new US Farm Bill. Democrats have sought to shield the scheme from cuts that Republican lawmakers have insisted upon. A final bill is likely to reduce expenditures on SNAP.

Trade-distorting support, or “amber” box payments in WTO jargon, has fluctuated in recent years. However, it remains well under the low levels of even the late 1990s, when the Uruguay Round Agreement on Agriculture persuaded the US Congress to reform farm policy.

The formal limit on “amber” payments is US$19.1 billion, with 2011 figures falling well shy of that at US$4.65 billion. Dairy and sugar continue to receive the bulk of such support, with these commodities seeing slight increases from 2010 levels.

Minimally trade distorting support, or “green” box payments, continue to grow. Aside from domestic food aid, environmental payments and disaster relief saw the biggest uptick, reaching US$125 billion. Other categories, such as general services, contracted slightly.

US spending on overall trade-distorting support would be capped at US$14.5 billion under the long-running Doha Round of trade talks, which would set a ceiling on the sum of amber, blue, and de minimis payments. This sum would have been US$14.37 billion in 2011, according to the new figures.