Fortifying food security – WTO norms should be made more realistic

Source: The post is based on the article “Fortifying food security – WTO norms should be made more realistic” published in the Business Standard on 11th May 2023.

Syllabus: GS – 3: food security.

Relevance: About issues with AoA.

News: Recently, the agriculture committee of the World Trade Organization (WTO) held a special session in Geneva. In that, India urged the WTO to find a permanent solution to the issue of farm subsidies and public stockholding for food security. 

About the history of the tussle between India and WTO

Food security matter has been hotly debated since the inception of the WTO’s Agreement on Agriculture (AoA). The AoA had prescribed an irrational outer limit for farm subsidies of 10% of the value of crop production, based on the prices prevailing between 1986 and 1988.

Any outgo on agricultural support in excess of this cap is deemed trade-distorting. However, an ad hoc relief measure was stipulated for the developing countries during the WTO’s ministerial summit at Bali in 2013 in the form of the “Peace Clause”.

India has often taken refuge under Peace Clause because of a) large stock accumulation due to its market, b) farm-income support policies entailing open-ended crop procurement at minimum support prices.

What are the issues with AoA?

a) The agreement limits the developing countries’ space for extending price support for farm commodities and restricts their policy space for taking up food-security programmes for the teeming poor, b) Relentless food inflation has rendered the existing food-stocking and farm-subsidy norms totally unrealistic, c) Exacerbated uncertainties about food production and global supplies due to climate change and geo-political factors, such as the Russia-Ukraine conflict have also made the ceiling ineffective.

About the demand for a permanent solution

Many countries including China, South Africa, Egypt, Sri Lanka, and many other African and Asian nations are in support of India to find a permanent solution. Any alternative plan has to be better, and more practical, than the present Peace Clause-based interim arrangement.

What should be considered while formulating a permanent solution?

-Ideally, the benchmark prices should be revised periodically, taking the average prices of the previous five years into account. This should be included.

-The food security-oriented programmes launched by various countries after the introduction of the Peace Clause in 2013 should also be factored in while assessing the aggregate measure of support to agriculture.

India, China, and several other countries demanded text-based negotiations for fixing the agenda for the next WTO ministerial meeting scheduled in Abu Dhabi. The WTO members should adhere to this.