New Delhi: Hardening its stand on the food security issue, India will insist that countries agree to a permanent solution to the dispute over public stockholding of foodgrains by December as originally promised, even though developing nations have been granted an indefinite interim reprieve.
Trade minister Nirmala Sitharaman will raise the issue at an informal meeting of World Trade Organization (WTO) trade ministers in Paris on Thursday ahead of the 10th WTO ministerial conference to be held in Nairobi in December.
“We are not satisfied with the peace clause for perpetuity. We need a permanent solution,” a senior commerce ministry official said on condition of anonymity.
The WTO approved the first global trade deal in its history in November, ending a four-month impasse after India and the US resolved their differences over public stockholding of food.
The issue of public stockholding of food revolves around the procurement of foodgrains from farmers at prices fixed by governments in order to promote the food security of poor countries. As these prices involve a degree of government subsidy, there is a cap on these subsidies as they could otherwise end up distorting global prices. However, developing countries insist that they should not be penalized for breaching any limits, arguing that such stockholdings are crucial for food security.
Though under the interim solution, developed countries have pledged not to drag developing countries to dispute if they breach the permissible subsidy levels, strict disclosure norms and the provision that a country cannot launch any new food programme under the so-called Bali pact have virtually made the pact infructuous.
The deal incorporated India’s stand that a temporary solution on public stockholding for food security reached at Bali last year will continue indefinitely and not just for four years, as agreed earlier. While a deal at Bali in December 2013 on the least-contentious issues of the Doha negotiations, such as trade facilitation and public stockholding, seemed to have ended the deadlock at multilateral trade negotiations, Prime Minister Narendra Modi’s government opposed the deal, calling it “unbalanced” because it failed to take care of the concerns of developing nations on food security.
Developing countries also oppose a WTO rule that caps subsidies to farmers at 10% of the total value of agricultural production based on 1986-88 prices. They point out that the base year is now outdated and they need to be given leeway to stock enough foodgrains to ensure food security for millions of their poor.
Devinder Sharma, a food and trade policy analyst, said India needs to stay firm on the matter of permanent solution on public stockholding because developed countries would not like India deriving such a deal. “If by December, developed countries do not allow such a deal to happen, then it would be clear that they never wished it to happen. India has lost the bargaining chip by agreeing to implement the trade facilitation agreement,” he added.
In Paris, Sitharaman will also raise the matter of the high farm subsidies provided by developed countries and will call for providing more market access to the world’s poorest nations—the so-called least-developed countries (LDCs).
“We will be specifically raising the issue of subsidies that developed countries provide to their agriculture sector. And when they are talking about trade in agriculture, where will these subsidies count? They have tailor-made green box, red box and amber box according to their own convenience. From our point of view, agriculture subsidies are a human rights issue,” the official added.
Abhijit Das, a professor and head of the Centre for WTO Studies at the Indian Institute of Foreign Trade, said developed countries would like to keep the ambition low for the Nairobi ministerial seeking to close their eyes on farm subsidies and declare the Doha development round closed. “If that happens, it would be disastrous. Farm subsidy reduction is one of the key mandates of this round, and if it is jettisoned, then it would not bode well for the negotiating function of WTO,” he added.
On LDCs, India will highlight the concessions that it has provided, which are higher than the ones provided by developed countries. “LDCs still require a lot of hand-holding. They lack the skills to handle ports and technology to turn ships faster. If we are doing it, why can’t developed countries do it? We are following up our concerns with action,” the official added.
Sitharaman is also expected to tell her counterparts from developed countries that there should be no differentiation made among developing countries as regards commitments to be undertaken or in the matter of special and differential treatment for developing countries. “The US has been raising the issue that among emerging economies, countries like India and China are growing rapidly and they should not be asking for differential treatment. India will insist that special and differential treatment will have to continue,” the official said.
WTO negotiators are currently in the process of finalizing a post-Bali work programme to be taken up for approval at Nairobi in December. However, they have so far failed to make any significant headway.
WTO director-general Roberto Azevêdo on Monday said that though countries have had detailed conversations across a range of issues, he is concerned about the slow progress. “On the basis of the discussions I have had over recent weeks, I am becoming increasingly concerned that we are not making the progress that is needed in the key areas of agriculture, industrial products and services,” he added.
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