AMS calculations were done keeping the prevailing prices in 1986-88. Since then, and especially after the 2007 global food crisis, the farm commodity prices have seen a quantum jump. The 1986-88 reference prices, which was a period when prices were very low, no longer holds true and have lost all its relevance. Secondly, the trade distorting subsidies that the US/EU has been providing all these years have not been done away with. In fact, the developed countries have expressed jubilation over the fact that the massive agricultural subsidies that OECD provides for agriculture, with 80 per cent going to big corporations and rich farmers, are not on the negotiating table at the forthcoming Bali Ministerial in December 2013.
Devinder Sharma blogs at Ground Reality.