WTO: India resolute on food security(TH)

WTO: India resolute on food security(TH)

Context

Article throws light on the stand that India is likely to take at the upcoming ministerial conference of WTO at Buenos Aires, Argentina in December

India’s stand

• No to restrictions on subsidies: India is not going to agree to severe restrictions on its right to give price subsidies to farmers through the Minimum Support Price (MSP) to procure grains from them for food security purposes
• Peace clause be made permanent: India, at the minimum, would push for the peace clause being made a permanent solution

Current arrangement: Peace Clause

• Currently an interim mechanism that goes by the name of ‘peace clause’ is in place as per which
• WTO members had agreed not to challenge developing nations at the WTO Dispute Settlement Mechanism if they breached the cap of the product-specific domestic support (which is 10% of the value of production)

Until when this mechanism of peace clause will be in place?

The ‘Peace Clause’ is available to developing nations, including India, till a permanent solution is found to public stockholding for food security purposes

Are there any preconditions to invoking peace clause?

Yes.

1. Admission of Breach: The country concerned will have to first admit that it ‘is breaching’ or ‘is about to breach’ the ceiling entitlement to give product-specific domestic support
2. Only be used for Public stockholding programs: The ‘Peace Clause’ can be used only for public stockholding programmes that have been in existence on the date at which it was agreed upon at the Bali Ministerial Conference in December 2013, and not for new programmes on public stockholding for food security purposes

A permanent solution is highly unlikely. Why?

Due to following reasons,

• Absence of active engagement by US: The U.S. has not been engaging actively on the matter till recently, and if the U.S. does not give its nod, it will be difficult to arrive at a decision
• EU in favor of checks: The EU also seems to be in favor of stringent checks on domestic support (subsidies) as a part of a permanent solution to this problem
• Prohibition on trade distorting exports: Most WTO members are of the opinion that there should be a commitment on prohibition of exports from public stockholding saying such exports would be trade-distorting