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

 
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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) To learn more about this author, visit African Development Bank's Website.

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African Development Bank
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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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