Geneva talks

India’s tough stand at WTO

Root Cause of Problem on Food Security

•Massive domestic subsidies given by the industrialized countries to their agricultural sector for many years. This in turn led to excessive production dumping in international markets as well as import restrictions to keep out foreign agricultural products from their domestic markets.

•WTO law, which states that market distorting farm subsidies can only be limited to 10% of the aggregate production. However, the support is calculated at the prices that are over two decades old.India is asking for a change in the base year (1986-88) for calculating the food subsidies. It wants the change to a more current base year on account of various factors such as inflation and currency movements. •As per the WTO guidelines, the implementation of India’s Food Security Act may come under market distorting subsidy because the act requires the government to purchase food grains at market price and sell it at below market price to two-thirds of the population in India. 

Source: The Telegraph(Kolkata) and TOI

Positive Outcome of the Bali Round

•After a series of failed attempts to reach agreement on a set of issues under the long running Doha Round of trade negotiations , the expectation was from the 9th WTO Ministerial Conference (MC) held in Bali in December 2013.

•The outcome was : An interim solution to exist until a permanent one is agreed. A work programme to produce a permanent solution within four years i.e. by the 11th WTO Ministerial Conference (2017).

•The Bali agreement establishes that until a permanent solution is found, Any member cannot challenge the compliance of a developing Member in relation to trade distorting domestic support to traditional staple food crops through existing public stockholding programmes for food security purposes, via the WTO Dispute Settlement Mechanism. Also there was an agreement on Trade Facilitation Agreement (TFA).

Source : Economic times and FAO trade policies brief No. 16

The Firm Stand•"While there was progress on the Trade Facilitation Agreement, other decisions including one on public stockholding for food security purposes and other development issues were sidelined.

•India decided not to ratify WTO's Trade Facilitation Agreement (TFA), which is dear to the developed world, without any concrete movement in finding a permanent solution to its public food stock-holding issue for food security purposes.

•It has asked WTO to amend the norms for calculating agricultural subsidies in order to procure food grains from farmers at minimum support price and sell that to poor at cheaper rates.

• ““Until now, it was always possible to argue that India upholds the multilateral obligations it commits to; by tomorrow, however, it may cease to be a statement of fact.”” – Forbes

Source: Economic Times and Forbes

UN supports India’s Stand

Supporting India's tough stand at WTO on the food security issue, UN body for development of agriculture IFAD on Monday said ensuring food for its people is more important than creating jobs in certain other nations.

“Creating jobs for some other country, while people are still hungry, doesn't make sense... If I was in the position of feeding my own family or creating jobs for someone else, what would I do? What would you do? ” - International Fund for Agriculture Development president (Kanayo Nwanze).

He also said: "The bottom line is that every government has the responsibility to ensure that it can feed its own people,"

Echoing similar sentiments, IFAD's country director for India Nigel Brett said India has a big task to feed its people. "You have a population of 1.2 billion people. You have a mammoth task in your hand of feeding people...in this case government has to do everything what it can do to feed its population in the interest..."

Source: Live mint and Wall Street Journal