The Changing Structure of Domestic Support and Its Implications for Trade

Movement toward the objective of undistorted world agricultural markets has been set back by the lapse since 2008 of the WTO Doha Round negotiations. In the absence of a new agreement, constraints on distortionary agricultural domestic support remain lax. One might have expected policies of subsidizing farmers to have faded in the high-price environment since 2008. But that is not the case. In both the US and EU, agricultural support policy is under review and new options are being devised. Likewise, support for agriculture has increased in key emerging economies. In the US, in particular, the next farm bill likely will contain support measures that would have been harder to enact if a Doha Round agreement were coming into effect. This paper reviews these developments and their implications for trade and future trade negotiations. The WTO commitments of the BRIC countries (Brazil, Russia, India and China) and their levels of agricultural support are examined, including the domestic support commitments of Russia under its accession to the WTO in 2012.