Tuesday, December 22, 2015

WTO deal to scrap agricultural export subsidies; critics say it benefits India, China

On Saturday in Nairobi the World Trade Organization agreed "to eliminate some $15 billion of subsidies on exported produce from milk to sugar and rice," a decision that "could level the playing field for farmers who don’t currently benefit from much government help, while raising the stakes for producers elsewhere who do," Lucy Craymer reports for The Wall Street Journal. "The agreement requires developed countries to eliminate subsidies starting Jan. 1, with the exception of some dairy, pork and processed products. Developing countries have until the end of 2018." (WSJ graphic)

"Export subsidies include any form of financial aid or support given by a government to a firm involved in exporting agricultural products," Craymer writes. "Opponents of subsidies say farmers in countries without them trade at a disadvantage in the global marketplace. The issue had been on the WTO’s list of unfinished business: An agreement in 2005 to end all agricultural export subsidies by 2013 never came to fruition."

Rep. Mike Conaway (R-Texas), the House Agriculture Committee Chairman, expressed concern Monday over the decision, "saying it provides a big exception for developing countries like China and India," Jenny Hopkinson reports for Politico. Conaway "said he was worried 'that the agreement allows developing countries to continue to use export subsidies for transportation and marketing for another 8 years even though the U.S. has held the position that the authority of countries to offer these sorts of subsidies expired back in 2004.'"

American Farm Bureau Federation President Bob Stallman said that the WTO deal "will 'strengthen U.S. agriculture’s ability to pursue market opportunities in international trade.'" He said,  “The measures adopted on food aid also will support U.S. programs that continue to provide food assistance around the world."

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