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Exactly a year ago on this day, the Bali Agreement was "gavelled to order" and India, led by the United Progressive Alliance (UPA) government, claimed "victory" at the World Trade Organisation, or WTO, for having secured a so-called "Peace Clause" for its food stockholding programme for a period of four years. A year later, Prime Minister Narendra Modi, at the head of the National Democratic Alliance government, is again claiming a "breakthrough" at having removed the four-year window on public stockholding for food security.
The real question is: between these two events, has anything changed for India's farmers, the producers of the grain that is procured and stocked by the government?
It was around 2008 that a bunch of developing countries, including India, China and Brazil, under the G-33 umbrella, entered a proposal on food security in the WTO negotiations. Meant to push the developed world into expediting the talks on agriculture under the stalled Doha round of talks, the G-33 proposal proposed to change the norms on food stocks programme and domestic food aid in developing countries with significant populations of resource-poor farmers.
The so-called Peace Clause allows the procurement of staple grain like rice and wheat at a government determined minimum support price (MSP) from low-income and resource-poor farmers. It is an interim measure that gives India and other developing countries with similar food programmes immunity from any legal challenge even if they exceed the minimum subsidy level of 10 per cent of the total value of food production as per the external reference price (ERP) prevailing in 1986-88.
However, in order to avail the interim measures, countries running such stockholding programmes will have to adhere to some very stringent conditions and the criticism is that the government has remained silent on this.
"The Peace Clause perhaps was not necessary," says Anwarul Hoda, former deputy director general of WTO and now a professor at Indian Council for Research on International Economic Relations (ICRIER). "When we are saying there is no threat of exceeding the 10 per cent limit, why make such a big noise?" One of the riders related to the 'Peace Clause' is that the countries have to notify their subsidies annually to WTO and indicate whether they are on the verge of exceeding the prescribed limit. India recently notified farm subsidies to the tune of $560 billion covering the period between 2004-05 and 2010-2011 as proof that it has not breached the de minis level yet.
According to Minister of State for Commerce and Industry Nirmala Sitharaman, India was able to achieve the feat of getting the Peace Clause accepted at Bali "without any concessions, compromise or new conditions". However, that has not pacified the farmers, on whose behalf ostensibly the new government opposed the Trade Facilitation Agreement that would have helped push the produce of developed countries into the emerging markets.
"In order to win the Peace Clause, we gave away the Trade Facilitation Agreement on a platter," says Biswajit Dhar, professor, Centre for Economic Studies and Planning, Jawaharlal Nehru University, New Delhi. The farmers are upset that the government failed to address the important issue of subsidies given to agriculturists in the rich countries. "We had hoped the interim measures would address the trade-distorting subsidies given by the rich countries to their farmers such as in the US, Europe and Japan," says Ajay Vir Jakhar, a Punjab-based farmer who also chairs Bharat Krishak Samaj farmers' forum. "When we compare our subsidies with those of food-exporting nations, Indians are not getting much from their government."
After successfully concluding the General Council meeting last week, which saw the signing of the Trade Facilitation Agreement, the first multilateral trade pact in the history of WTO, and extending the Peace Clause, WTO Director General Roberto Azevêdo said that the organisation was "back on track."
"The impasse over the issue of public stockholding and trade facilitation has prevented any meaningful progress on the Doha package for the last few months. However, there's now a chance that members could re-engage in talks about the shape of a potential future deal, ahead of the July deadline and next year's ministerial conference," says Jonathan Hepburn, agriculture programme manager, International Centre for Trade and Sustainable Development, Geneva. He says that while a number of WTO members are continuing to move ahead with separate talks on regional trade agreements and in plurilateral talks on specific issues, the developing countries have instead shown interest only in pursuing agricultural trade issues in the multilateral trading system, not least because some questions - such as farm subsidies - can only be addressed properly in this context.
"A permanent solution is one issue, but it does not go very far," feels Dhar. Like him, other experts are raising questions about how India will use other safeguard instruments like the Special Safeguard Mechanism (SSM) and Special and Differential Treatment (SDT). India had been pushing for measure like SDT and SSM while simultaneously rejecting arrangement made bilaterally or plurilaterally among the US, Europe, Japan and other countries. "What is the government willing to bargain in lieu of these mechanisms?" asks Dhar. "With mega trade pacts coming in, the government has to focus on where these things fit in in the multilateral space."
Jakhar agrees with this and believes that it is time India teamed up with major food-importing countries in Asia and Africa on cutthroat negotiations with developed countries. "We are not ready for WTO. We do not have the negotiating skills," he says. "This needs to be considered as much a diplomatic exercise as an academic exercise. We are confused about what the government is negotiating."
According to Hoda, the government should, without wasting time, focus on the main Doha Round before the US, Europe, Japan, Canada and other developed countries seal the mega trade deals such as the Trans-Pacific Partnership Agreement and Transatlantic Trade and Investment Partnership.
