Analytical Note, August 2009

The ACRE Program – A Volatile New Source of U.S. Amber Box Spending.

WTO member countries viewed the 2007-08 farm policy debate as a measure of U.S. seriousness in getting a Doha Round deal. Congress brushed aside these objections and passed a Farm Bill that maintains high levels of subsidies for larger-scale farm operations. However, the packaging of key programs changed.

This paper looks at the new ‘Amber Box’ program in the 2008 U.S. Farm Bill, called ACRE. It does not replace the traditional suite of U.S. marketing loan assistance and countercyclical payment programs. Instead, it provides U.S. growers with a choice between the traditional programs and ACRE. The sign-up for ACRE for this year is happening right now (Aug 2009), and so this program bears a close look.

We provide a brief look at several analyses suggesting that payouts under ACRE could exacerbate U.S. non-compliance with its Uruguay Round commitments in some years. ACRE’s payouts under most scenarios also exceed the ‘landing zone’ for proposed U.S. agricultural Aggregate Measure of Support (AMS) under any Doha Round deal.

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