Subsidies issue: US, EU want India to detail food support programmes to WTO

India and China have been asked to submit information on their food subsidy programmes to the World Trade Organisation by the US, the EU and some other countries.

The countries want it to be a pre-condition to starting negotiations on finding a permanent solution to India’s problem of legitimising food procurement subsidies.

This has raised the hackles of New Delhi and other members of the G-33 group of developing countries (a group with interests in agriculture for protecting their poor farmers) who have argued that no such conditions were laid down in the mandate of the Bali Ministerial meeting last December.

India has also been asked to explain how it establishes that the recipients of its support programme for poor farmers, at a recent meeting of the Committee on Agriculture at the WTO.

“These are all diversionary tactics used by developed countries, especially the US, to delay progress in a key area of concern for developing countries,” a Commerce Ministry official told Business Line .

The US, Australia, Brazil, the EU, Pakistan, Canada, Thailand, Costa Rica and Paraguay have also raised concerns about India’s wheat programme as the country also exported the foodgrain.

Last December in Bali, WTO members had agreed to a pact for streamlining movement of goods across borders by upgrading infrastructure and cutting down transaction time (Trade Facilitation Agreement) being pushed by developed countries. India and some other developing countries had given their assent to the pact as the developed countries had promised to allow them to give food procurement subsidies without attracting sanctions, as a short-term measure, while promising to work on a long-term solution to the problem soon after the Ministerial.

It is important for India to be allowed higher level of farm subsidies, which is currently fixed at 10 per cent of agriculture production, as it could breach the limit once its Food Security programme is fully implemented.

Without a permanent solution to the problem, India faces the risk of action by any member which is not satisfied with the information on prices, subsidies and procurement of agricultural items submitted by the country.

Commerce Secretary Rajeev Kher, in a press conference last week, had said that India was unhappy with the fact that while much progress had happened on implementation of the trade facilitation agreement, some countries were not allowing talks on food security to begin.

New Delhi has demanded that work on all issues agreed to in Bali, including the package of incentives for Least Developed Countries, move at the same pace.

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