WTO: India to fast-track food subsidy notification
BUENOS AIRES: In the absence of a deal at the World Trade Organisation (WTO) meeting in Buenos Aires to allow developing countries a free hand to procure staples for their subsidised food programmes, India will fast-track its food subsidy notification obligations at the WTO to use an interim reprieve agreed in 2013 to ensure it does not violate WTO rules.
While a permanent solution would have given more legal certainty and flexibility to India to run its food security programmes, India’s current public distribution system will not be immediately impacted by the indecision as a revised peace clause stuck in 2014 runs in perpetuity. However, if India seeks to use the peace clause or indefinite reprieve on government procurement, then it has to give information to the WTO about the size of its food subsidy bill till last year. India has only notified its food subsidy bill till 2013-14.
“If the rupee revalues very strongly or the minimum support price rises sharply or governgiven ment procurement becomes huge, then only we will have to use the peace clause. I don’t see that happening immediately. I don’t need to use the peace clause at least for another year. Before that, we will complete our transparency obligations,” an Indian trade diplomat said speaking under condition of anonymity.
Present WTO rules cap government procurement for subsidised food programmes by developing countries at 10% of the total value of agricultural production based on 1986-88 prices. After developing countries led by India complained that the base year is now outdated and they need to be leeway to stock enough food grains to ensure food security for millions of their poor, WTO at its Bali ministerial conference in December 2013 gave a four-year reprieve to developing countries till December 2017 during which period if they violate the 10% cap, developed countries will not take legal action against such developing countries. This interim solution came to be known as peace clause.
However, the Centre forced developed countries to clarify that the peace clause will continue indefinitely if a permanent solution on the matter cannot be found at the 11th Ministerial Conference (MC11) in December 2017.
A commerce ministry statement on Tuesday said India is “surprised and deeply disappointed” that despite an overwhelming majority of members reiterating for a permanent solution, “a major member country has reneged on a commitment made two years ago to deliver a solution of critical importance for addressing hunger in some of the poorest countries of the world.”