Extract

Alan MATTHEWS

Abstract

The consistency of WTO rules and disciplines with the policy environment needed in developing countries to pursue their food security objectives has long been a source of controversy. At the 9th WTO Ministerial Conference in Bali, Indonesia in December 2013, the G-33 group of developing countries placed the treatment of procurement for public stock-holding for food security purposes on the Bali agenda. Disagreement over how to resolve this issue came close to collapsing the Bali meeting. This chapter discusses the background to the controversy over accounting for producer support when a government implements a public stock-holding scheme for food security purposes, describes the interim mechanism that was agreed at Bali and reviews some possible options for the permanent solution that WTO members have committed to agree before the 11th Ministerial Conference in 2017. The premise of the chapter is that adapting WTO rules on agricultural policies where this can be shown to be justified to enable developing countries to pursue their food security objectives is a preferable approach to simply increasing their limits on trade-distorting support. Two proposals which deserve further consideration in this context are discussed. The first would make explicit allowance in the WTO rules for countries to adjust their measured domestic support for excessive rates of inflation. The second would make a distinction between the use of administered prices for price support and as a safety net in the procurement of food grains for public stock-holding policies for food security...