Rethinking Agricultural Domestic Support under the World Trade Organization
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The Department of Economic Science was founded in 1898 to teach economic theory as a truth of industrial life, and was very much concerned with applying economics to business and industry, particularly agriculture. Between 1910 and 1967 it showed the growing influence of other social studies, such as sociology, history, and political science. Today it encompasses the majors of Agricultural Business (preparing for agricultural finance and management), Business Economics, and Economics (for advanced studies in business or economics or for careers in financing, management, insurance, etc).
History
The Department of Economic Science was founded in 1898 under the Division of Industrial Science (later College of Liberal Arts and Sciences); it became co-directed by the Division of Agriculture in 1919. In 1910 it became the Department of Economics and Political Science. In 1913 it became the Department of Applied Economics and Social Science; in 1924 it became the Department of Economics, History, and Sociology; in 1931 it became the Department of Economics and Sociology. In 1967 it became the Department of Economics, and in 2007 it became co-directed by the Colleges of Agriculture and Life Sciences, Liberal Arts and Sciences, and Business.
Dates of Existence
1898–present
Historical Names
- Department of Economic Science (1898–1910)
- Department of Economics and Political Science (1910-1913)
- Department of Applied Economics and Social Science (1913–1924)
- Department of Economics, History and Sociology (1924–1931)
- Department of Economics and Sociology (1931–1967)
Related Units
- College of Agricultural and Life Sciences (parent college)
- College of Liberal Arts and Sciences (parent college)
- College of Business (parent college)
The Center for Agricultural and Rural Development (CARD) conducts innovative public policy and economic research on agricultural, environmental, and food issues. CARD uniquely combines academic excellence with engagement and anticipatory thinking to inform and benefit society.
CARD researchers develop and apply economic theory, quantitative methods, and interdisciplinary approaches to create relevant knowledge. Communication efforts target state and federal policymakers; the research community; agricultural, food, and environmental groups; individual decision-makers; and international audiences.
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Abstract
This paper focuses on the third pillar of the Uruguay Round Agreement on Agriculture (URAA) of the World Trade Organization (WTO), the discipline of agricultural domestic support. The paper examines the current definition of agricultural domestic support used by the WTO, focusing on the Aggregate Measure of Support (AMS) and other forms of support that are less to least distorting (Blue and Green Box payments). The analysis looks at the recent experience of four member states (the United States, the European Union, Japan, and Brazil). The structure of recent support varies considerably by country. Some countries, notably the United States, have strategically used the de minimis exemption to deflate their support figures substantially in order to remain within AMS limits, even though total support has exceeded these limits. The paper investigates the possible effects of changing the definition of the AMS so that it better reflects current support conditioned by market forces. If market prices (world and/or domestic) were to be used to compute current market support, a greater variability of the AMS would result, and violations of AMS limits would be more likely given the anticyclical nature of policies included in the AMS, especially for the United States and European Union.
We also identify possible changes that would lead to more substantial trade reforms. In particular, we argue for phasing out the de minimis exemption and Blue Box support, adding a generous Green Box definition, which would allow countries to move quickly away from trade-distorting policies (Amber Box and the most trade-distorting Blue Box policies), followed by a phase-down of Green Box payments over time. The recent reforms of the European Union's Common Agricultural Policy (CAP) exemplify the spirit of the first part of the recommendation, while resistance to phase-down of Green Box payments may be overcome by a "reasonable" reduction schedule.
Comments
This is a briefing paper published as “Rethinking Agricultural Domestic Support under the World Trade Organization,” in Will Martin & Kym Anderson, eds. Agricultural Trade Reform & the Doha Development Agenda. Palgrave- Macmillan & the World Bank, 2006: 221-244.