Global agriculture talks to ‘walk the walk’ as Russia looks on

Russia is attending a crucial meeting of the World Trade Organisation as it struggles to reach agreement on the Doha round of trade talks. Trade ministers from the key member countries are holding talks in Geneva – where Russian representatives

“We talked the talk, now we have to walk the walk” – said WTO chief Pascal Lamy urging the delegates to finally conclude the seven-year Doha round on liberalizing global trade.

We need positive results from this week's engagement, and all need to approach it with this clear objective in mind.

Central to the trade talks are an agreement to cut agriculture subsidies and customs duties on industrial and agricultural products.

The European Union is willing to slash farm tariffs by 60 percent as part of a new global trade pact – a deeper cut than it has ever offered. Russian farmers experience considerably different levels of protection, with Vladimir Plotkinov, Leader of the Agrarian Party noting,

The European Union spends 45% of its budget to support farmers and develop agricultural territories. Russia spends only 1% percent of the budget to support agriculture. It’s a matter for discussion. And the double standards here are unacceptable.

Russia has launched a 5 year state programme to revive agriculture and reduce its heavy dependence on imported goods.  Russian subsidies are much lower, at $18 dollars a hectare, than in the US, at about $250 dollars. Russian import duties are less than a third of the average among industrialized countries, with Yuri Trushin, CEO of Rosselkhosbank noting.

The EU is discussing a question of cutting the subsidies. But we have chosen a better way to help our agrarian businesses – we subsidise the interest rate on loans.

As Russia is preparing to join the WTO, the level of subsidy that Russian farmers get will effectively be set not in Moscow but in Geneva. Those talks are still to come, but with such a gulf between subsidies in Russia and those in Europe and US, the argument is likely to be tough.