WTO negotiations and repurposing agriculture subsidies for a sustainable future

Agriculture subsidies are estimated to increase by US$ 2 Trillion in 2030. Many countries are critical of policies such as market price support and input subsidies due to their adverse environmental impacts, climate change, and biodiversity loss. Recently, in addition to trade distortion, environmental concerns are playing a crucial role in disciplining agriculture subsidies at the WTO. Many members and international organisations have called for a substantial reduction in the subsidy entitlement of individual members to address these concerns. The reduction is proposed to be proportionate to the size of the members' current and future trade-distorting entitlements. The paper examines whether the proposed methodology to discipline agriculture subsidies promotes agriculture sustainability from the perspective of social, economic, and environmental concerns. The results suggest that the proposals based on proportionate methodology undermine not only social and economic sustainability but also leave the existing imbalances in the AoA unaddressed, disregard special and differential treatment, and negate the decade-long efforts made by developing country members in finding a permanent solution for public stockholding for food security.