NGFA, NAEGA Support Ag Subsidy Reform

WASHINGTON - Jul 25/02 - SNS -- Continued reductions in tariffs on agricultural products and elimination of all direct export subsidies in the upcoming round of agricultural trade negotiations under the World Trade Organization would substantively reduce trade-distorting policies in a relatively short time frame, say two of the United States' largest grain industry associations.

The Bush administration's proposal, released today, would phase-in reductions in tariffs over five years, with high tariffs subjected to greater reductions than lower ones. The proposal also would expand tariff-rate quotas and eliminate all direct export subsidies, which would make "substantial progress in opening markets to greater competition and enhancing fair play in global trade," said the National Grain and Feed Association (NGFA) and North American Export Grain Association (NAEGA) in a joint statement.

"The elimination of export and import monopolies will contribute to market transparency, which should benefit producers and consumers worldwide," the NGFA and NAEGA said. "And the concept that trade-distorting domestic support should be limited to no more than 5% of a country's total value of agriculture production should work to eliminate surplus production that keeps global agricultural prices depressed for long periods."

The two grain organizations noted that worldwide agricultural subsidies currently are approaching $350 billion annually. "To the extent that such subsidies encourage overproduction and production in areas that are not efficient distorts trade and penalizes efficient agricultural production and marketing systems around the world," the NGFA and NAEGA said.

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