While removing many subsidies that go against WTO’s regulations on farming, Vietnam hinders itself from the opportunity to take advantage of assistance policies allowed.

Experts in the second phase of the Multilateral Trade Policy Assistance Program (Mutrap II) showed that point clearly at the meeting held in Hanoi recently.

Do what is not prohibited!

According to WTO Agreement on Agriculture, prohibited subsidy policies are stipulated in the Amber Box, and the allowed ones in the Green and Blue Box.

According to research by program experts, Ms. Nguyen Thi Hong and Pham Thi Lan Huong, most of our subsidy policies for domestic farming are in Green and Blue Box. Thus, we can uphold these subsidies as well as gradually transfering some from Amber Box to Green and Blue ones. The Total Aggregate Measurement of Support (AMS) accounts for 3.4% of production, much lower than the minimum rate of 10% allowed by WTO. Exceptionally the sugar-cane industry is having a really high rate of 98.7% for each product, so this industry will face remarkable impacts when subsidies are cut much down.

However, many allowed subsidies are still not used such as subsidy for structure transforms through the program to remove resources from agriculture and direct payments to producers instead of exporters. Besides, we still don’t have assistance measures designed for income such as income insurance programs, and income welfare system for farmers… In terms of exporting agricultural products, we haven’t taken advantage of subsidy for marketing expenses, domestic and international transportation fees, export promotion fund to give credit to exporters.

Ms. Huong said that actually due to the low budget for agriculture, the money allowed for Green Box policies is little although, to some extents, these policies are really helpful for farmers.

What Boxes can bring to farmers?

According to Mr. Antonia Cordella – Mutrap II expert, it is obvious that joining WTO will enhance the trade liberalization in agriculture, which will bring benefits to consumers and competition challenges to farmers. As a result, farmers have to reduce production cost to improve competitiveness. Those who cannot survive in the competition have to get out of the industry, altering production model.

Obviously “not all farmers gain the benefit” –Ms Pham Thi Lan Huong affirmed. Farmers working in the sector that produces inputs replacing exporting such as sugar-cane, or grows uncommercial plants or farmers in remote areas… will gain the least or even get loss from complying WTO agreements. Ms. Huong suggest making use of permitted policies such as regional assistance policy, social security system, price insurance…. to absorb shock for farmers in the fluctuation of market and crop.

Mr. Cordella reckoned that to make the new policies useful to farmers and agriculture, we would need measures to widen market approach, to improve marketing system and especially the market information system.

He said, as farmers only focus on producing and rely on middlemen to deal with marketing and distribution, what administration bodies must do is to provide as much market information as possible. “So that those 2 mentioned objects can share common values from retailing prices, as to reduce middlemen’s excessive benefits and increase farmer’s interests.
Huong Giang