U.S. challenges China’s crop support levels
China Provides Domestic Support In Excess of its WTO Commitments
Product WTO Commitment 2012 2013 2014 2015
Wheat ≤ 8.5% Over Over Over Over
Indica Rice ≤ 8.5% Over Over Over Over
Japonica Rice ≤ 8.5% Over Over Over Over
Corn ≤ 8.5% Over Over Over Over
On Sept. 13, the U.S. announced a trade dispute with China at the World Trade Organization due to excessive governmental support for rice, wheat and corn production, according to a news release from the U.S. Department of Agriculture.
Under the World Trade Organization’s Agreement on Agriculture, each country in is only supposed to provide every ag with so many subsidies, that way, there isn’t overproduction, thus maintaining a fair global marketplace.
“The World Trade Organization’s Agreement on Agriculture applies to all members. Each country must follow agreed upon levels of domestic support,” said Zippy Duvall, president of the American Farm Bureau Federation in a statement. “Violation of domestic support levels can lead to overproduction and price-depressing surpluses that affect farmers worldwide.”
U.S. Trade Representative Michael Froman, U.S. Secretary of Agriculture Tom Vilsack and members of Congress announced the complaint — the 14th of its kind against China. According to the USDA release, the U.S. has won each of the previous disputes, as well as another nine it has raised against other countries.
1n 2015, China provided about $100 billion in excessive market price support for rice, wheat and corn, which effectually increases the price of these commodities to a level that incentivizes Chinese farmers to up production, according to the USDA release. That increase in production then makes it more difficult for producers outside China, including American farmers, to be able to compete.
“These programs distort Chinese prices, undercut American farmers, and clearly break the limits China committed to when they joined the WTO,” Froman said. “We will aggressively pursue this challenge on behalf of American farmers and hold the Chinese government accountable to the standards of fair global trade.”
China has exceeded its financial commitments under the World Trade Organization — which promise that the country won’t provide more than 8.5 percent of the value of production in price support — every year since 2012, according to the release.
For the congressmen and women in top ag producing states, the announcement of the complaint signified a welcome chance for increased American competition in the global market.
Rep. Adrian Smith, R-Neb., said producers in his district — the Third District of Nebraska, which covers the western three-fourths of the state — are happy to sell products on the global market, as long as trade rules are enforced and “the playing field is level.”
He, along with ag leaders like Chip Bowling, president of the National Corn Growers Association, said actions like these are important so long as the value of international trade and a relationship with China is maintained.
“China represents a large and growing market for agriculture exports, and American producers – the most effective and innovative producers in the world – are well-positioned to meet Chinese demand,” Smith said at a news conference. “With 96 percent of the world’s consumers living outside our country, trade agreements create opportunity for U.S. agriculture, and so long as the U.S. maintains a leadership role, I am confident American producers will continue to meet the demands of an ever-growing population around the world.”❖
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