Genva: India’s core demand for a permanent legal solution to its public distribution of foodgrain at reasonable prices is a “a priority issue" for the World Trade Organization’s 11th ministerial meeting in Buenos Aires starting on 10 December, said the chair conducting negotiations on agricultural issues.

“Public stockholding for food security purposes (PSH) is a priority issue for MC 11 (Ministerial Conference 11)," said chair ambassador Stephan Karau of Kenya, who is overseeing the negotiations on agriculture for Buenos Aires.

On Tuesday, Karau issued what is known as a restricted job document on “the state of play in the agriculture negotiations" in which he listed the priority issues based on the proposals made by members.

The 11-page document states that “all members recognize that unlike other issues, there is a firm deadline and clear ministerial mandates both from Bali (the ninth ministerial conference) and Nairobi (the tenth ministerial conference), for a permanent solution to be found by MC 11."

India, a major player in the G-33 group of developing countries led by Indonesia, has repeatedly maintained that there cannot be an outcome without a permanent solution at Buenos Aires.

During closed-door meetings held before the issuance of the current document, India’s trade envoy J.S. Deepak made it known in no uncertain terms that New Delhi will not tolerate any outcome at Buenos Aires without a resolution of the PSH issue, according to people familiar with the meetings.

The G-33 tabled concrete proposals on how to arrive at a permanent solution by amending the existing rules in the WTO’s Agreement on Agriculture. It suggested an amendment for incorporating a new annexure for exempting foodgrains procured specifically for public distribution purposes from subsidy-reduction commitments.

The G-33 demanded that PSH programmes be included in the list of Green Box subsidies that are currently exempted from reduction commitments. The US and the European Union annually provide more than $200 billion for Green Box programmes following the rules they finalized during the previous Uruguay Round. But, for inexplicable reasons, the public distribution programmes of developing countries were included under the so-called Amber Box measures based on 1986 prices. The Amber box measures include most trade-distorting farm subsidies and WTO members are countries are mandated to reduce them. The G-33 demanded an overhaul of these controversial provisions of the previous Uruguay Round agreement to ensure that their rising populations dominated by sizable percentage of poor people had access to foodgrains at affordable prices.

But there is opposition from the US, the EU, Australia, Canada, Brazil, among others to amending the rules to enable PSH programmes on a permanent basis with an appropriate legal shield.

Karau mentioned several caveats such as the coverage of countries for availing the benefits of PSH programmes, the products to be coverage in such programmes, the safeguards and anti-circumvention provisions to be included in the permanent solution, and the transparency provisions.

The chair said there are two proposals—one from the EU and Brazil along with Colombia, Peru and Uruguay; and another submitted by the G-33 group of developing countries led by Indonesia, India, and China among others. “The two proposals on the table suggest exempting the support provided under public stockholding programmes from the aggregate measurement of support (AMS) calculation (subsidy reduction commitment)." However, “the attached conditions (in the two proposals) differ significantly," he said.

The chair said “several members (the US, Pakistan, the EU, Brazil, and Australia, among others) have expressed their opposition to the idea of an unlimited exemption."

“There seems to be nevertheless a convergence of views on some key elements to be included in the solution, such as safeguards and transparency requirements," he argued. But, “the scope and content of these elements are yet to be agreed upon," said Karau, arguing that “many other elements would also require an agreement such as the country coverage, product coverage, and programme coverage."

As members begin negotiations next week, it remains to be seen whether there will be a smooth passage to the permanent solution or an outcome burdened with conditions impossible to implement.

There is also no certainty that the permanent solution will involve an amendment to the Agreement on Agriculture like the creation of a brand new agreement on trade facilitation in WTO’s rulebook.