Home / News / World /  India’s hopes of a permanent solution for public stockholding hang in balance

Geneva: India’s hopes of securing a simple and effective permanent solution for public stockholding programs (PSH) for food security hang in the balance after Australia, Pakistan, the European Union, and the United States rallied around a Russian proposal that New Delhi first agree to onerous conditions for availing of the legal instrument.

The permanent solution is a core demand of India and other members of the G33 farm coalition led by Indonesia for the World Trade Organization’s eleventh ministerial conference in Buenos Aires beginning 10 December. Trade ministers had mandated WTO members to finalize the permanent solution for PSH at the conference.

According to people familiar with the development, on 1 November, the chair for Doha agriculture negotiations ambassador Stephan Karau held a closed-door meeting with trade envoys of the European Union, Brazil, India, and deputy trade envoys of China and the US, Russia, Australia, Pakistan, Norway, and Singapore, among others, to discuss two issues: transparency and notification requirements;  and safeguards for the proposed permanent solution. 

Russia presented a seven-page restricted “draft ministerial decision of 13 December 2017" that listed the “notification and transparency" provisions as well as “anti-circumvention/safeguard conditions." Among others, it suggests “prior" notification before implementing the PSH programme about “the value of stocks to be acquired and the average value of production for the previous three years of the product concerned."

It also wants India and other developing countries to agree to seven burdensome “anti-circumvention/safeguard" conditions. The conditions include (i) ensuring that stocks procured for PSH programs “do not distort trade or adversely affect the food security of other members"; (ii) the beneficiaries will be barred if they do not “present a full complete notification within the established timeframe"; (iii) India and other G33 members must ensure “no direct export from the (PSH) stocks shall occur upon the release of products from the stocks nor any release of products from the stocks shall occur on the condition that they are exported"; (iv) India and other users of the PSH programmes must ensure that there cannot be any increase of exports by an agreed percentage of products procured for PSH programme for food security;(v) applied tariffs for the products meant for PSH programs “shall not exceed (X%) of the average applied tariffs in the period of 2013-17"; (vi) India and other developing countries which are currently exporting rice and other agricultural products will not be able to use the permanent solution if their exports of rice or other products meant for PSH exceed 5% of global export share of the product; (vii) entities like the state trading corporation (STC) cannot engage in export of products procured under PSH programmes.

India, however, challenged the Russian proposal on both transparency and safeguard conditions. India’s trade envoy J.S. Deepak said the transparency requirements demanded cannot be implemented by even major industrialized countries in the normal course. India presented concrete evidence of the transparency requirements that are normally suggested for implementing WTO agreements and the intrusive conditions demanded for the permanent solution, according to a personwho was present at the meeting and spoke on condition of anonymity.

Deepak said India will not accept any “additional" safeguard conditions beyond that stipulated in the Bali interim decision on a peace clause for PSH programmes, the person said. 

The Bali decision said “any developing Member seeking coverage of programmes shall ensure that stocks procured under such programmes do not distort trade or adversely affect the food security of other Members."

Representatives of China and Indonesia present at the meeting supported India’s tough stance that it is ready to negotiate on transparency and safeguards but will not go beyond the Bali interim decision, the person said.

In sharp opposition, Australia said it cannot accept any “Bali-minus" outcome, suggesting that it fully supports the Russian proposal. The US suggested Bali is a good starting point but suggested that they would support the Russian demand for safeguard requirements except in one or two areas.

Pakistan called for enhanced safeguards maintaining it was willing to look into reduced transparency and notification requirements, but only if safeguards are further strengthened. Singapore said the outcome on permanent solution must be in accordance with the Bali interim decision but it must not impose conditions on exports, according to another person present at the meeting.

In all probability, several issues concerning the safeguards, particularly the commitment to ensure that stocks procured for PSH programs are not exported will go to the wire in or Buenos Aires and might require the highest political intervention, said an African trade official who asked not to be named.

The chair has convened another meeting of eight important countries- the US, the EU, China, India, Brazil, Australia, Norway, Russia, and Indonesia on Tuesday to explore whether there can be further convergence on transparency and safeguards.

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