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Domestic farm support programs in developed countries: Provisions of Agreement on Agriculture

Domestic farm support programs in developed countries: Provisions of Agreement on Agriculture

A basic source of distortion in the world market for agricultural commodities and primary
products has been the differential level of domestic support that developed and developing
countries can give to the production of these commodities. This has tended to reduce the
price competitiveness of developing countries. Thus, the WTO provides for a commitment
by each developed country to reduce its domestic support measures in favour of agricultural
products. However, for developing countries, government measures of assistance, whether
direct or indirect, to encourage agricultural and rural development are regarded as an
integral part of their development programs. Hence, the WTO provides that investment and
agricultural input subsides (e.g. fertilizer) which are generally provided to low-income or
resources-poor producers in developing countries shall be exempted from domestic support
reduction commitments that would otherwise be applicable to such measures in developed
countries. This is contained in Article 6 of the Agreement on Agriculture.

African Development Bank
Economic Research Working Paper Series
Enhancing Africa’s Trade: From Marginalization
to an Export-Led Approach to Development
Milton A. Iyoha
Professor, Department of Economics & Statistics
University of Benin, Nigeria
Economic Research Working Paper
No 77 (August 2005)





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African Development Bank
(Visit African's Website) The African Development Bank is the premier financial development institution of Africa, dedicated to combating poverty and improving the lives of people of the continent and engaged in the task of mobilizing resources towards the economic and social progress of its Regional Member Countries.The Bank’s s mission is to promote economic and social development through loans, equity investments, and technical assistance. The ADB is a multilateral development bank whose shareholders include 53 African countries and 24 non-African countries from the Americas, Asia, and Europe. It was established in 1964, with its headquarters in Abidjan, Côte d’Ivoire, and officially began operations in 1967.

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