N.Sartanova - Ph.D., Associate Professor
Kostanai State
University
The influence of
budgetary support of agriculture in WTO member countries
The agriculture in Kazakhstan
plays a huge role, providing stability of economy and food safety of the
country. Experience of support of all branches of agriculture in the countries
with the developed market economy is important at the stage of Kazakhstan introduction
into the WTO. Internal support of agriculture has gained the greatest
distribution in the developed countries which is carried out in two directions:
the compensation of the costs to farmers for the
purchase of agricultural machinery, fertilizers implementation state
concessional and grant works on the development of public infrastructure in
rural areas (roads, irrigation systems, power lines etc) [1].
One
of the most common forms of budget support - that farmers receive the
difference between the minimum set by the government and the actual purchase
prices, the lower price at which farmers sell their products to the government.
Agreement on Agriculture of the WTO divides all support measures prohibited,
permitted and measures to be reduced, so-called measures «blue», «green» and «yellow»
basket [2].
Measures of «green» basket -
the term used within the limits of the WTO concerning measures of internal
support of agriculture which can be released from under country obligations on
their reduction and are excluded from the aggregated indicator of support.
These measures should meet following requirements: not to render deforming
influence on foreign trade; to be carried out at the expense of governmental
programs financed from the state budget; not to provide redistribution of means
of consumers; not to provide maintenance of the prices of manufacturers.
In the Appendix 2 the list of
the governmental programs and the measures directed on maintenance of the
prices of manufacturers is resulted in the Agreement on WTO agriculture:
scientific researches; agriculture pest control; a professional training; services
in advancement of the goods in the markets; services in popular infrastructural
maintenance (an electrical supply, roads, water supply, drainage systems,
preservation of the environment, etc.) provided that on services do not join expenses
subsidising of an infrastructure in farms; financial participation of the
government in programs of insurance and maintenance of incomes; the help at
acts of nature; programs of the regional help.
The governments are obliged to
notify on these measures and regularly to inform WTO Secretary on their
realisation. The appendix 2 to the Agreement on WTO agriculture contains
detailed methodical instructions concerning these programs.
Yellow WTO basket are the
measures having deforming influence on trade. Unlike "a green" basket,
measures of a «yellow» basket are considered as measures which have deforming
influence on trade, and such measures are limited in limits which the WTO
member country co-ordinates either at joining, or during the Uruguayan round.
And these figures are fixed in absolute expression in lists of obligations of
each country, fixed in the form of the aggregated measures of support,
so-called AMS (Aggregate Measurement of Support), on the basis of real support
for any representative period (usually it is three years) which precede the
joining moment. The joining countries coordinate this level with members of the
WTO, and the obligation on volume of support which they co-ordinate, are fixed
in the list which is applied on documents of joining. If it does not occur, if
AMS are not fixed in lists, support can be represented within the limits of «an
amber» box only within level «de minimis» (is the share of support of total
cost of made production: for the developed countries - 5%, for developing -
10%) [1, 2].
In AMS separately grocery
specific support and grocery nonspecific is considered. Grocery specific
support is a support which is directed on support of any concrete product or
the goods. Grocery nonspecific support - support without a binding to the concrete
goods. It is considered that such measures more transparent and make smaller
impact on trade.
As examples of measures of an
"amber" basket it is possible to result price support of intervention
purchase of any goods, a grant for separate kinds of production,
indemnification of a part of cost of mixed fodders, mineral fertilizers etc.
Privileges concern grocery nonspecific support on payment of cost of fuel and
lubricants materials, consumption by agricultural manufacturers of the electric
power on favourable terms, the credits given to farmers on preferential terms.
«Blue» basket of the WTO - the
measures directed on restriction of manufacture. They mean direct payments to
manufacturers within the limits of programs of restriction and curtailment of
production of the agrarian products which are carried out by deducing of the
earth from an agricultural turn, reduction of a livestock of cattle in
agriculture, employment reductions in agriculture. Payments are made on
separate agricultural grounds. These measures do not fall under restrictions
within the limits of obligations of member countries of the WTO on reduction of
internal support and do not join in the Aggregated indicator of support.
The following block of support
which is regulated within the limits of the agreement on agriculture are export
grants. In general, within the limits of the WTO export grants are forbidden,
but for agriculture the exceptions are possible. These exceptions are for those
countries which have fixed applications of export grants in certain volume and
obligations on their reduction. Such right is not for all countries of the WTO.
Export grants are listed in agreement article 9.1 on agriculture, that is those
export grants which can be applied in volumes which are coordinated by these
countries.
However, now in the new round
of WTO talks, which are aimed at further improving the rules of the
organization, to further liberalize trade, has been previously agreed that by
2013 the developed countries no longer use export subsidies. For developing
countries is being provided a longer grace period, but they also have to
abandon the use of export subsidies in 2017. So now a new round of agreements
is not issued, and now this agreement is groundless. Kazakhstan at a certain
stage tried to defend application of export grants, however, taking into
account these arrangements of a new round, WTO member countries have been very
negatively adjusted in relation to this intention, appealing to that within the
limits of the WTO there is a refusal of export grants, so why the joining
country should use them. As a result now the offer of Kazakhstan on agriculture
does not provide use of export grants, i.e. after joining the WTO export grants
in agriculture will not be used [3]. It should be noted that it is detrimental
impact to agricultural producers.
Moreover, it is necessary to
notice that the WTO does an exception from the general requirement for its most
favored members Thus, members of IRIA, giving economic preferences to each
other, are not obliged to give them to third countries. This position, for
example, successfully uses the European Union. The EU representing uniform
customs territory and carrying out uniform policy, is an independent member of
the WTO [3]. Certainly, the CU of Belarus, Kazakhstan and Russia would like to use
the same scheme. The joint statement of the states testifies their intention to
join the WTO as unified customs territory. However, in October 2009 because of considerable
resistance of the USA and the European Union they have been compelled to change
the position and to declare that they will access to WTO as separate units [4].
The given circumstance is one
of many proofs of existence of one more serious problem facing the Euroasian
alliance: counteractions from other geopolitical forces. It is natural that
occurrence on global arena of one more powerful competitor will cause serious
concern of other important authors of world politics and economy. Being guided
by the strategic interests, the USA and the European Union will try to brake
naturally and, whenever possible, even to stop development of the contender
and, thus, not to admit formation of the powerful political-economical
Euroasian union.
The
literature:
1 www.wto.ru -
The World Trade Organization Site
2 Dragneva-Ljuers
R.O. The way to free trade in the CIS: problems of the right and policy.//Jurisprudence,
2009. - ¹ 4. - With. 85-101
3 Shpilkovsky Í. The endless way of Russia, Belarus and
Kazakhstan to the WTO//the information-analytical bulletin the BASQUE. -
http://trade.ecoaccord.org
<http://trade.ecoaccord.org/bridges/0409/1.htm>
4 infospy.ru/Articles/article_storyid_2403.html