Agricultural Domestic Support Reforms at the WTO: An Assessment of the Proportional Reduction Approach

Domestic support reforms remain an unresolved and contentious issue in the WTO agricultural negotiations. There are proposals to halve the current global trade-distorting domestic support entitlements by 2030, where members would have to undertake reductions proportionate to their existing domestic support entitlements. This study critically examines the implications of the proportional reduction approach on the policy space of 164 WTO members to support their farmers. The results show that this approach fails to address the issues and concerns of developing members regarding domestic support reforms, and these members would be required to undertake higher reduction commitments than their developed counterparts. Additionally, the per-farmer entitlement for developed members would remain massive under this approach. Contrary to general belief, the least developed countries would lose half of their flexibility to support their farmers. Further, the proposed approach would dilute the existing special and differential treatment for developing, and least developed, members.