India has decided to strike a harder bargain on food security at the World Trade Organisation than it did in July. It wants restrictive conditions attached to the use of the peace clause dropped.

New Delhi, which had wanted the ‘peace clause’ offering protection against retaliatory action for breaching farm subsidy caps extended indefinitely in return for support to the trade facilitation pact, is now seeking more.

“We want the peace clause to be worded in a way that we can actually use it,” a Government official told BusinessLine .

In its present form, the peace clause requires mandatory submission of various documents related to a country’s procurement programme before it can be used. Not only the Centre, but States too have to submit data for five years giving details on the food security programme and all related numbers. “This may be impossible to provide, as many States do not maintain all this data,” the official said.

Information has to to be supplied on agencies running the programmes, crops covered, provisions relating to purchase of stock, determination of administered price, accumulation of stock, release of stock, determination of release prices, and the eligibility to receive procured stocks.

Moreover, the peace clause notes that protection against legal action for breaching subsidy limits will be given only if the stocks procured under such programmes do not distort trade or adversely affect the food security of other members.

“If a developing country has to prove to the WTO that the procurement subsidies are non-trade distorting, then why do we need the peace clause at all? We might as well fight cases at the WTO,” the official added.

In July, India had blocked an agreement on trade facilitation — a pact to smoothen flow of goods across by upgrading the Customs infrastructure — as it wanted its concerns on food security addressed first. It was decided at the Bali Ministerial meet of the WTO last December that a protocol on trade facilitation would be signed by July 31 2014.

Countries such as the US and Australia have now accused India of breaching the trust.

But New Delhi is unwilling to relent and wants an amendment to the Agriculture Agreement of the WTO so that price support for public procurement and food aid in developing countries — to benefit low-income farmers or those who lack resources — is considered a ‘Green Box’, or non-trade distorting, item and allowed without limits. Alternatively, it wants a change in the reference price year for calculating the subsidies.

At the Bali WTO Ministerial, India was offered the `peace clause’ so that no action is taken against its subsidies till a solution to its problem of subsidy calculation is found. However, New Delhi later realised that the offer was only for four years, till the next Ministerial meeting in 2017.

“Although the US has now approached us in Geneva (WTO headquarters) to tell us that they are willing to extend the peace clause indefinitely, our Ambassador to the WTO has told them that we are not ready to accept that yet,” the official said.

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