Viewpoint: decoupling of agricultural support programs: appropriate action for South Africa, the Cairns Group and developing countries

Abstract

Protectionist agricultural support policies became progressively more distortionist, expensive and ineffective. The 1994 GATT agreement is intended to reduce this. However, particularly the USA, EU and Japan are likely to continue supporting their farmers. Decoupled payments have been proposed to substitute for production and price related programs. Decoupling will undoubtedly be much less trade distorting. Its advantages should outweigh side effects involving farmers' capital position, possible managerial effects, land price effects and environmental aspects; some of these may, in any event, be positive. CAIRNS group and developing countries should insist on accompaniment of decoupled payments by reduced total AMS support expenditure.