The World Trade Organization’s (WTO) ninth ministerial conference (MC9) seems inches away from a historical breakthrough with the draft ministerial decision on public stockholding for food security purposes accepting India’s demand for continuing the interim measure until a permanent solution on doing away with the cap on food subsidies is put in place.
The draft ministerial declaration released by WTO states: “In the interim, until a permanent solution is found … Members shall refrain from challenging through the WTO Dispute Settlement Mechanism.”
The draft declaration, which has not yet been officially adopted by the MC9, also stated that the interim measure will be applicable “in relation to support provided for traditional staple food crops in pursuance of public stockholding programmes for food security purposes existing as of the date of this Decision.”
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In what could be literally called as “India’s moment” here in the scenic Indonesian island of Bali, the 159-member countries seemed to have adopted what commerce and industry minister Anand Sharma had been firmly asserting ever since the talks began December 3.
“This was a war of nerves. This will be historical breakthrough for India since the establishment of WTO,” a highly placed official, involved in the talks, told Business Standard.
Apparently, the decision was arrived at the brainstorming meeting between India, US and WTO director general Roberto Azevêdo that went for three heavy hours till the wee hours of the morning here. Sharma was also believed to have made a phone call to Prime Minister Manmohan Singh last night and in the afternoon today and the strategy was discussed in the Cabinet that was held in New Delhi today.
Sharma, who was supposed depart for India tonight has extended his stay as the talks got delayed, is expected to make a statement at the Parliament that is in session currently, upon his return.
The decision taken today is the culmination of a proposal on food security that was floated by the G33 union of developing countries, which was spearheaded by India. It had proposed that the farm subsidy rules existing presently should be relaxed allowing government more leg-room to buy food at administered prices as part of their food stockholding programmes.
The draft WTO MC9 declaration also states that in order to qualify for this waiver, a developing country member must have certain eligibility criteria. Firstly, it should notify the Committee on Agriculture that it at risk of breaching the ‘di minis’ level or the minimum amount of domestic support that can be given by a country even though they distort global trading rules.
Developing countries are allowed to offer food subsidies to the limit of 10% of the total agriculture produce. For developed countries the limit is 5%, according to the present rules of Agreement on Agriculture.
For India, success of the talks in Bali assumes significant importance as it scrambles to offer subsidies for its poor and marginal farmers across the country. While according to WTO rules these subsidies are regarded as ‘trade distorting’, for developing countries like India it has direct relation to the livelihood of its around 600 million farmers.
India recently rolled out the National Food Security Act, 2013 under which the government provides rice, wheat and millet at a subsidised rate.
This is for the first time that the government is facing a WTO ministerial with general elections just few months away. Hence, the outcome in Bali will have impact on the government’s fate in its domestic constituency also.