Ahead of a key ministerial conference of the World Trade Organization (WTO) later this year, India has proposed that subsidies for food security programmes should be allowed without any limits and that members who give trade-distorting farm subsidies above $10 billion, eliminate them within three years. India has sought to correct the asymmetries in the WTO’s rules for agriculture In two submissions made last week.
The proposal on food security was floated by G33-of which India is a part-as per which, WTO members will not challenge through the Dispute Settlement Mechanism, the support that developing countries provide for foodstuffs in pursuance of public stockholding programmes.
“A developing member shall endeavour not to export from the procured stocks unless requested by an importing member,” the G33 said in the proposal.
Commerce and industry minister Piyush Goyal last week said that as part of the trust-building exercise, G-33 must strive for positive outcomes on a permanent solution to public stockholding for food security purposes which is of utmost importance, finalisation of a special safeguard mechanism quickly, and a balanced outcome on domestic support.
“India has actively made these submissions amid many countries’ efforts to shift the focus to non-trade issues such as sustainability before the ministerial,” said an official.
In the other proposal, India said that seven members – European Union, Japan, the US, Russia, Switzerland, Canada and Norway – have more than 96% of the global entitlement of the trade-distorting farm subsidies (called Final Bound Total Aggregate Measurement of Support in trade parlance) while the remaining Members have less than 4% share.
As per the proposal, all members with such entitlements between $1-10 billion will be required to reduce their support for each agricultural product and cap it at their de minimis levels, through equal annual instalments, within a period of five years from the date to be decided by the members.
De minimis or the threshold caps the domestic support at 10% of the value of production but many developed countries have entitlements to provide domestic support well over 10% of the value of production.
“It is a supreme irony that developed members, with relatively fewer farmers, have significant flexibility to provide trade-distorting support to their farmers. On the other hand, most developing Members, with a very large number of farmers, do not have the policy space for providing support to their farmers,” India said in its submission.
Quoting studies, India said that the de minimis entitlement and the amount of trade-distorting subsidy per person employed in agriculture in Switzerland were $37,952, in the US was $24,714) and in the EU was $12,361 compared to China’s $1,208, India’s $451 and Kenya’s $206.
The Economics Times