India has sought the support of the United States Trade Representative (USTR) for its food security programme so that it can give more food subsidies to the poor without attracting penalties.
In a letter to USTR’s Mike Froman, commerce and industry minister Anand Sharma has said “food security is crucial for large developing countries like India with hundreds of millions of people subsisting below the poverty line”. Sharma sought changes in the WTO rules to let poor countries stockpile subsidised food.
In the context of the WTO Bali Ministerial next month, New Delhi has said that some subsidies that are given as part of the procurement for public stockholding from the poor and marginal farmers should not be regarded as a ‘prohibited subsidy’ or ‘amber box’ subsidy by the WTO.
In WTO terminology, subsidies are identified by “boxes” that are given the colours of traffic lights: Green (permitted), amber (slow down or to be reduced) and red (forbidden).
“Public stockholding is allowed but is limited. The minister has sought no challenge on the public stockholding of stocks if our subsidies go beyond the 10% level. In the present WTO rules, we could be challenged and hence, we are discussing an interim mechanism for a permanent solution. Even in the interim mechanism, we want a no-challenge clause,” said a commerce ministry official.
The letter assumes significance as WTO director general Roberto Azevedo had earlier said that the proposal on food security was not mature enough as other proposals.
On the issue of agriculture and food security, developed countries have shown inclination for a peace clause for developing countries on the food security issue for 2-3 years while developing countries, represented by the G-33 group, are demanding this at least for a period of 9-10 years leading to a stalemate. The “peace clause” in WTO parlance gives legal security to member nations and protects them from being challenged under other WTO agreements.
India is demanding amendments to the Agreement on Agriculture under the WTO so that it can give more food subsidies to poor without attracting penalties.