WTO meet begins in Buenos Aires: India seeks solution on food stock issue

A WTO member country's food subsidy bill shouldn't breach 10% limit of value of production based on reference price of 1986-88

Commerce and Industry Minister Suresh Prabhu has said that a permanent solution to the public stockholding of food stock is a "must have" at the 11th ministerial conference of the World Trade Organisation (WTO) that begins at Buenos Aires on Sunday.

The permanent solution, the minister said, should also cover the current as well as future programmes of all developing member countries and LDCs as it concerns the livelihood of millions of poor people.

The G33 is a grouping of 47 developing countries having common objectives and similar concerns. It has been at the forefront in taking forward issues affecting food security and livelihood of farmers.

The minister said in a series of tweets after attending a meeting of G33 grouping:








Strongly reiterating the need for a concerted action on public stockholding issue, Prabhu said it is an important instrumentality used in developing countries across the globe, where agriculture is mostly rain-fed, to ensure two square meals a day to millions of poor people.

Prabhu also pitched for special safeguard mechanism (SSM), an instrument that would help the developing countries to deal with import surges and price dips as a result of high subsidies provided by the developed countries to agriculture products.

"Special safeguard mechanism is important for developing countries to address import surges and price dips from highly subsidised imports of agriculture products from developed countries," the minister said, adding it deals with the question of livelihood of farmers.

"The demand by G-33 countries for an instrument that has been available to a select few for over two decades is reasonable and pragmatic," Prabhu said, stressing that the grouping represents the collective voice of over two-thirds of humanity -- an overwhelming majority of poor and subsistence farmers.

Under the global trade norms, a WTO member country's food subsidy bill should not breach the limit of 10 per cent of the value of production based on the reference price of 1986-88. Apprehending that full implementation of food security programme may result in breach of the WTO cap, India has been seeking amendments in the formula to calculate the food subsidy cap.

As an interim measure, the WTO members at the Bali ministerial meeting in December 2013 had agreed to put in place a mechanism popularly called the Peace Clause and committed to negotiate an agreement for a permanent solution at the 11th ministerial meeting at Buenos Aires.

Under the Peace Clause, WTO members agreed to refrain from challenging any breach in prescribe ceiling by a developing nation at the dispute settlement forum of the WTO. This clause will be there till a permanent solution is found to the food stockpiling issue.

India's stand has been that the permanent solution should be an improvement over the Peace Clause.

An agreement on SSM is important for India as the applied custom duty on some of the agriculture products is at the bound rate, meaning it cant be raised further. These include products such as chicken legs, apples, olive oils and rice.

The SSM, if agreed, would help in dealing with import surges and price dips.