8. Public stockholding for food security purposes (PSH) in July 2021 draft agriculture negotiations text

The draft aims for decisions at the November 30–December 3, 2021 ministerial conference (“MC12”)

See also
New agriculture draft suggests nervousness in divided WTO

Previous: 7. special safeguard mechanism (SSM) | next: 8. transparency

By Peter Ungphakorn
POSTED AUGUST 3, 2021 | UPDATED AUGUST 3, 2021

Note: the official July 29, 2021 draft text for the WTO agriculture negotiations is here with a minor correction here. Links to all sections are here.

This page combines the two sections of the text on public stockholding for food security purposes, the chair’s assessment, and her draft
s.

Note also that neither public stockholding nor food security are at issue here. It’s about purchases into the stocks at government-set prices, which comes under trade-distorting domestic support. Explained here

8          PUBLIC STOCKHOLDING FOR FOOD SECURITY PURPOSES (PSH)

8.1.         Public Stockholding for Food Security Purposes (PSH) is a priority issue for the proponents who have repeatedly stressed its usefulness as a tool for addressing food security and rural livelihoods, especially in times of crisis such as the COVID-19 pandemic. Consequently, they have urged the adoption of a permanent solution by MC12 that is simple, efficient, and broader in coverage.

8.2.         While Members acknowledge the Bali and Nairobi Ministerial mandates to find a permanent solution and recognize its potential role as a food security instrument, the non-proponents remain particularly concerned about potential trade distortions and the prospect of unlimited market price support being granted to PSH programmes of developing country Members. Several Members have argued that PSH programmes represent one tool among many that can be used to ensure food security and have called for the use of measures with minimal trade-distorting potential. These Members also consider enhanced transparency requirements and safeguards crucial to providing them with reassurances against unintended consequences.

8.3.         Given the widely divergent views of Members, I have found it very challenging to propose a way forward on this issue. Taking into account the proposals by Members and the views expressed during my consultations with a wide range of Members, as well as documents and analysis put forward in recent years, my first option proposed below draws inspiration from the draft text circulated at MC11 and recent submissions made by Members.11

11 Relevant documents in this regard include the Minister Facilitator text at MC11 circulated on 12 December 2017, JOB/AG/204, JOB/AG/206, JOB/AG/214, JOB/AG/201 and JOB/AG210.

8.4.         The second option proposes a way forward with an intermediary step to be taken at MC12.


Compare with new November 2021 text

PUBLIC STOCKHOLDING FOR FOOD SECURITY PURPOSES
DRAFT MINISTERIAL DECISION 1

The Ministerial Conference,

Having regard to paragraph 1 of Article IX of the Marrakesh Agreement Establishing the World Trade Organization;

Acknowledging the Ministerial Decision of 7 December 2013 (WT/MIN(13)/38 – WT/L/913), the General Council Decision of  27  November  2014  (WT/L/939)  and  the  Ministerial  Decision  of 19 December 2015 (WT/MIN(15)/44 – WT/L/979); and

Recognizing the importance of public stockholding programmes for food security purposes for developing country Members [as further highlighted by the COVID-19 pandemic];

Decides as follows:

1.             By this Decision, Members agree to put in place a permanent solution as set out below on public stockholding for food security purposes. This Decision replaces the interim solution (WT/MIN(13)/38 – WT/L/913) for Public Stockholding for Food Security Purposes adopted in Bali, Indonesia in December 2013, as clarified in the General  Council Decision of 27 November 2014 (WT/L/939).

2.            Provided that the conditions set out in paragraphs 3 to 6 are met, Members shall not challenge through the WTO Dispute Settlement Mechanism, compliance of a developing country Member with its obligations under Articles 6.3 and 7.2(b) of the Agreement on Agriculture in relation to support provided for [any foodstuff covered thereof]/[traditional staple food crops1] in pursuance of public stockholding programmes for food security purposes2,3, that are consistent with the criteria of paragraph 3, footnote 5, and footnote 5&6 of Annex 2 to the Agreement on Agriculture.

            1 This term refers to primary agricultural products that are predominant staples in the traditional diet of a developing Member.
            2 This Decision should be read as covering public stockholding programmes for food security purposes existing as of 7 December 2013 as well as new programmes introduced after this date by least developed country Members, and those by developing country Members [with an upper limit of total procurement not exceeding [15%] of the domestic production quantity of the crop in question].
            3 This Decision does not preclude developing country Members from introducing programmes of public stockholding for food security purposes in accordance with the relevant provisions of the Agreement on Agriculture.


NOTIFICATION AND TRANSPARENCY

3.             To benefit from this Decision, a developing country Member must:

               a. have provided, prior to the notification under sub-paragraph (b) below, general information about each public stockholding programme that it maintains for food security purposes under paragraph 2 by completing entries 2-4 of the template contained in the Annex4;

               4 This is without prejudice to the existing domestic support notification requirement in G/AG/2 pursuant to Article 18.3 of the Agreement on Agriculture.

               b. have notified the Committee on Agriculture at the latest as per sub-paragraph (c) below, that it is exceeding or is at risk of exceeding either or both of its Aggregate Measurement of Support (AMS) limits (the Member’s Bound Total AMS or the de minimis level) as a result of its programmes mentioned above;

               c. have fulfilled for the initial year in which it invokes this Decision and continue to fulfil during the entire period that it invokes this Decision, its domestic support notification requirements under the Agreement on Agriculture in accordance with document G/AG/2 of 30 June 1995, but not later than the period specified in the Annex;

               d. have provided for the initial year in which it invokes this Decision, and continue to provide on an annual basis during the entire period it invokes this decision, additional information, along with the notification as per sub-paragraphs (b) and (c) above, by completing the template contained in the Annex, for each public stockholding programme that it maintains for food security purposes; and

               e. provide any additional relevant statistical information described in the Statistical Appendix to the Annex as soon as possible after it becomes available, as well as any information updating or correcting any information already submitted.

ANTI-CIRCUMVENTION/SAFEGUARDS

4.            Any developing country Member seeking coverage of its programmes under paragraph 2 shall ensure that stocks procured under such programmes do not distort trade or adversely affect the food security of other Members.5

            5 Members confirm their understanding that the stocks procured under such programmes shall be used exclusively for food security purposes and not be exported. [This understanding shall not apply to food purchases by the World Food Programme for non-commercial humanitarian purposes.]

5.            This Decision shall not be used in a manner that results in an increase of the support subject to the Member’s Bound Total AMS or the de minimis limits provided under programmes other than those notified under sub-paragraph 3(b).

CONSULTATIONS

6.            A developing country Member benefiting from this Decision shall upon request hold consultations with other Members on the operation of its public stockholding programmes notified under sub-paragraph 3(b) and provide the necessary information.

MONITORING

7.            The Committee on Agriculture shall monitor the information submitted under this Decision.

FINAL PROVISIONS

8.            This Decision shall not be construed to impede the Uruguay Round agricultural reform programme aimed at correcting and preventing restrictions and distortions in world agricultural markets as stated in the preamble to the Agreement on Agriculture. Accordingly, developing country Members invoking this Decision for their public stockholding programmes, [and who are in a position to do so], [shall]/[shall endeavour] to undertake the necessary reforms in order to bring them back into compliance with their domestic support obligations under this Agreement.


ANNEX
TEMPLATE

[Developing Country Member’s name]

General information

1. Factual information confirming that DS:1 notification and relevant supporting tables have been submitted no later than [24 months] after the end of the reporting year. (e.g., date and document details)
2. Details of the programme sufficient to identify food security objective and scale of the programme, including:
       a. Name of the programme
       b. Traditional staple food crop(s) covered
       c. Agency in charge of implementation
       d. Relevant laws and regulations
       e. Date of commencement of the programme
       f. Officially published objective criteria or guidelines
3. Practical description of how the programme operates, including:
       a. Provisions relating to the purchase of stocks, including the way the administered acquisition price is determined
       b. Provisions related to volume and accumulation of stocks, including any provisions related to pre-determined targets and quantitative limits
       c. Provisions related to the release of stocks, including the determination of the release price and targeting (eligibility to receive procured stocks)
4. A description of any measures aimed at minimising production or trade distortive effects of the programme
5. Statistical information (as per the Statistical Appendix below)
6. Any other information considered relevant, including website references

Statistical Appendix (per crop) (data for the latest three years)

 Unit[Year 1][Year 2][Year 3]
[Name of the crop]    
a. Opening balance of stocks    
b. Annual purchases under the programme (value)    
c. Annual purchases under the programme (quantity)    
d. Annual releases under the programme (value)    
e. Annual releases under the programme (quantity)    
f. Purchase prices    
g. Release prices    
h. End-year stocks    
i. Total production (quantity)    
j. Total production (value)    
k. Information on population benefiting from the release of this product and quantities released:    
            – Estimated number of beneficiaries at national level and, if possible, at sub- national level    
            – Quantity released to the beneficiaries at the national level and, if possible, at the sub-national level    
            – Other    
l. In the case of government aid to private storage, statistics on the support granted and any updated statistics    
m. Total imports (value)    
n. Total imports (quantity)    
o. Total exports (value)    
p. Total exports (quantity)    

PUBLIC STOCKHOLDING FOR FOOD SECURITY PURPOSES
DRAFT MINISTERIAL DECISION 2

The Ministerial Conference,

Having regard to paragraph 1 of Article IX of the Marrakesh Agreement Establishing the World Trade Organization;

Acknowledging the Ministerial Decision of 7 December 2013 (WT/MIN(13)/38 – WT/L/913), the General Council Decision of  27  November  2014  (WT/L/939)  and  the  Ministerial  Decision  of 19 December 2015 (WT/MIN(15)/44 – WT/L/979);

Recognizing the importance of public stockholding programmes for food security purposes for developing country members [as further highlighted by the COVID-19 pandemic]; and

Taking note of the proposals made by Members in this regard;

Decides as follows:

1.             Pursuant to the Nairobi Ministerial Decision (WT/MIN(15)/44 – WT/L/979), Members shall continue to pursue negotiations and make all concerted efforts to agree and adopt a permanent solution to the issue of public stockholding for food security purposes in dedicated sessions of the Committee on Agriculture in Special Session (CoA-SS).

2.            [In the interim, Members agree to extend the Interim Solution established by the Ministerial Decision of 7 December 2013 (WT/MIN(13)/38 – WT/L/913) and the General Council Decision of 27 November 2014 (WT/L/939) to public stockholding programmes for food security purposes of least developed countries enacted after 7 December 2013.]

3.             The General Council shall regularly review progress in these negotiations.

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Updates: None so far
Image credit: Background aerial shot of farmland | Julian Ebert, Unsplash, CCO

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