Procuring Food Stocks Under World Trade Organization Farm Subsidy Rules

The report examines the conflict between WTO farm subsidy rules and public stockholding programs used by developing countries for food security. It analyzes the impact of outdated reference prices and proposes five potential paths toward a permanent solution, concluding that a modified version of the 2013 Bali Decision is the most viable approach.

• Developing countries face a conflict where procurement of food at administered prices for food security may exceed WTO limits on trade-distorting domestic support, specifically the aggregate measurement of support (AMS) or de minimis ceilings.
• The current WTO calculation for market price support relies on a fixed external reference price (FERP) based on a 3-year average from 1986–1988, which the report argues may grossly under- or over-value support because it does not reflect modern price levels.
• The 2013 Bali Decision provided an interim 'peace clause' that shields certain public stockholding programs from legal challenge under the WTO Dispute Settlement Mechanism, provided members meet specific notification and transparency requirements.
• The G33 developing country coalition has proposed several solutions, including excluding food bought at administered prices from AMS calculations, revisiting the external reference price, or accounting for excessive inflation.
• Exporting nations, including the United States and the Cairns Group, express concern that exempting these programs from ceilings could allow large developing countries to provide unlimited support, distorting global markets.
• The report identifies five broad options for a permanent solution: updating AMS base periods, redefining eligible production, exempting support when administered prices are below international prices, exempting LDCs and small economies, and building on the Bali Decision.
• Updating base periods to a 'floating' average (e.g., a 3-year or 5-year Olympic average) could better capture actual market distortions and remove anomalies between WTO and OECD measurement methodologies.
• Redefining 'eligible production' to exclude the share of output self-consumed by subsistence farmers could benefit small states, particularly in Africa, though data collection remains a practical challenge.
• The report concludes that the most promising path is a permanent solution based on the Bali Decision, potentially expanded to include a wider range of foodstuffs and new programs, provided it is coupled with rigorous anti-circumvention, safeguard, and transparency provisions.
• Transparency and notification compliance are significant hurdles, as 34% of domestic support notifications for the entire WTO membership remain outstanding.

APA

Glauber, J., & Sinha, T. (2021). Procuring Food Stocks Under World Trade Organization Farm Subsidy Rules. International Institute for Sustainable Development. https://www.iisd.org/system/files/2021-08/food-stocks-wto-farm-subsidy-rules.pdf

Chicago

Glauber, Joe, and Tanvi Sinha. Procuring Food Stocks Under World Trade Organization Farm Subsidy Rules. International Institute for Sustainable Development, 2021. https://www.iisd.org/system/files/2021-08/food-stocks-wto-farm-subsidy-rules.pdf.

Wikipedia

{{cite report |last1=Glauber |first1=Joe |last2=Sinha |first2=Tanvi |title=Procuring Food Stocks Under World Trade Organization Farm Subsidy Rules |publisher=International Institute for Sustainable Development |date=August 2021 |url=https://www.iisd.org/system/files/2021-08/food-stocks-wto-farm-subsidy-rules.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{glauber2021procuring, author = {Glauber, Joe and Sinha, Tanvi}, title = {{Procuring Food Stocks Under World Trade Organization Farm Subsidy Rules}}, institution = {International Institute for Sustainable Development}, year = {2021}, month = aug, url = {https://www.iisd.org/system/files/2021-08/food-stocks-wto-farm-subsidy-rules.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }