Food subsidy: India to press WTO for permanent solution

Sandeep Dikshit

New Delhi, February 26

Meeting against the backdrop of the farmers’ agitation, India will insist at the WTO Ministerial, which opened in Abu Dhabi on Monday, that the “peace clause” or concessions on farm subsidies must be made permanent from its present interim status.

India has already won an endorsement from a meeting of 47 countries under the G-33 banner on Sunday. In a statement, the G-33 expressed serious concern over the lack of progress in agriculture trade negotiations, especially on the public stock holding (PSH) programme under which governments procure foodgrains from farmers at MSP and distribute it to the poor or under PDS. This protects both the producers and the consumers.

Under PSH, the food subsidy bill should not be more than 10 per cent of the value of production with the price prevailing between 1986 and 1988. India wants to amend the Agreement of Agriculture (AoA) to allow PSH programmes to cost more than the WTO limits.

This group of 47 least-developed countries, including India, also called on the WTO Ministerial to safeguard the right of developing countries to use the Special Safeguard Mechanism (SSM) to guard against sudden surges in imports or a crash in prices.

Besides the farmers’ agitation where one of the demands is for India’s withdrawal from WTO if the peace clause is sought to be terminated, the WTO Ministerial is taking place under the most severe global food price crises since the one in 2007-08. Besides, the International Grain Council has said wheat stocks in 2023-24 are at the lowest in a decade.

If farm subsidy or the peace clause is made permanent, countries will be able to conceive food security schemes of any amount. A decade back, efforts quarterbacked by India, ensured that the WTO General Council (GC) extended the peace clause in perpetuity, pending a permanent solution. The 10th Nairobi Ministerial approved the GC decision to extend the interim peace clause. But neither the Nairobi Ministerial nor the two that followed could not arrive at a decision because of opposition from the US and the Cairns Group comprising net foodgrain exporters.