Take an inch for a mile. About an error of metrics in WTO rules and its impact on the ability of countries to build public stocks for food security

Many developing countries use public stocks to provide free or subsidised grain to food-insecure households or to mitigate sharp increases in grain prices. However, the building of public stocks is regulated by the WTO, as public procurement may be used to provide farmers with a price support. This support is bounded jointly with the other forms of non-exempt domestic support for agriculture. Since 2012, WTO rules on public stockholding programmes have been questioned by a group of 33 member countries, and are at the top of the WTO negotiation agenda. The topics debated are i) the way this support should be calculated, and ii) the maximum level of support allowed. This article addresses the first topic. It identifies three biases in WTO rules and estimates the magnitude of the gap between the support actually provided and the support calculated according to WTO rules. It appears that, for grains, the support calculated is generally several times higher than the real support, compromising countries’ compliance with their domestic support commitments and thereby significantly reducing their ability to build public stocks. Moreover, the gap is not the same for all countries and is generally much higher for poor countries: the countries that most need public stocks for food security are those with the least freedom to build them. This article thus proposes a simple way to correct the rules that specify how the support provided by public stockholding programmes should be calculated.