Under the WTO rules, developing countries such as India need to limit their public procurement of foodgrains such as wheat and rice to within 10% of the value of the crop. Photo: AFP
Under the WTO rules, developing countries such as India need to limit their public procurement of foodgrains such as wheat and rice to within 10% of the value of the crop. Photo: AFP

India wants workable solution on public stockholding for food security at WTO meet

India has made it very clear that it will not accept an inferior permanent solution at WTO's MC11 on public stockholding for food security purposes, says commerce ministry

New Delhi: India will not accept an inferior permanent solution on public stockholding for food security purposes at the Buenos Aires ministerial conference (MC11) of the World Trade Organisation (WTO), Indian commerce ministry officials said on Saturday.

“Though India considers a permanent solution on public stockholding for food security purposes to be most mature for harvesting at MC11 because of a clear mandate from Bali and Nairobi, we are very clear that we will not accept an inferior permanent solution. It has to be an improvement over the peace clause and it has to be workable," the official added, ahead of the MC11 to be held between 10-13 December at the Argentinean capital city.

Under the WTO rules, developing countries such as India need to limit their public procurement of foodgrains such as wheat and rice to within 10% of the value of the crop. After India enacted the National Food Security Act, 2013, which aimed to provide subsidized foodgrains to approximately two-thirds of its 1.3 billion population, the demand for public procurement increased significantly.

At the Bali ministerial conference in December 2013, India secured a so-called “peace clause". Under it, if India breaches the 10% limit, other member countries will not take legal action under the WTO dispute settlement mechanism. However, there was confusion over whether the temporary reprieve would continue after four years.

The Narendra Modi government after coming to power in 2014 forced developed countries to clarify that the peace clause will continue indefinitely if a permanent solution on the matter cannot be found by MC11.

However, public procurement for any new food programme of the government for food security purposes will not benefit from the indefinite peace clause as the concession is limited to the programmes running in 2013, at the time of the Bali conference. The concession also comes with onerous notification obligations about farm subsidies provided in the previous year. So far only eight countries out of 184 WTO members have notified their farm subsidies till the last year.

While India considers it has covered most of the staple foods under the food security programme and the restrictions on new food programmes will not impact us, the onerous notification conditions make the peace clause unimplementable for India. However, the restrictions on new food programmes is likely to impact other developing countries like Kenya, Zimbabwe and China and India has promised to fight for deletion of the condition.

India also is of the view that elimination of fisheries subsidies which was considered a deliverable may be postponed to the next ministerial with a work programme since there is lack of consensus on how to handle issues such as differential treatment for the resource-poor fishermen in developing countries like India.

India along with China is also seeking a work programme for elimination of trade distorting agriculture subsidies provided by developed countries known as aggregate measurement of support which is not available to developing countries.

On the proposal of setting global e-commerce rules, India is of the view that discussions should continue at various working groups and when discussions mature to a certain level they can be taken up by the general council of the WTO for further action. However, developed countries are pushing for accelerated work programme on e-commerce to be finalized at MC11 while China wants discussions on e-commerce to happen in a single body instead of the various working groups going on at present.

India also sought more transparency in negotiations and has opposed attempts to take decisions in small groups at the MC11 drawing from its sour experience from the Nairobi ministerial in 2015.

The reporter is in Buenos Aires at the invite of India’s commerce ministry to cover MC11.

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