India, China on same page on food security

WTO chief Pascal Lamy recently urged the world to harvest “low-hanging fruit” (in terms of trade liberalisation) while it is clear during his tenure that the decade-old Doha Round talks are unlikely to be concluded. While developing countries insist that “any change on the Doha mandate should be a negotiated outcome,” The 9th ministerial in Bali from December 3-6 is a glimmer of hope.

As far as WTO talks on agriculture is concerned, there is a demand on emerging economies like India to reduce tariffs. Currently, the bound tariffs (the extent to which it can be raised) maintained by India is the highest in the case of oilseeds at 300% and the highest applied (real) tariff is 80% in case of wheat. Reduction of these tariffs is linked to subsidy reduction by the developed world.

In order to qualify, green box subsidies must not distort trade or at most cause minimal distortion. They have to be government-funded (not by charging consumers higher prices) and must not involve price support. Hence, green box subsidies are allowed without limits, provided they comply with the policy-specific criteria. The green box is defined in Annex 2 of the Agriculture Agreement.

At present, there is ambiguity on including India’s food subsidy programme in the green or amber box and the country is seeking legal certainty on the same.

“India is

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