Farm pact at WTO distant, but India gains support

India’s fight at the World Trade Organization (WTO) seeking continued legitimacy for its food procurement programmes has got a shot in the arm with a majority of developing countries and some food exporting developed countries supporting a farm text drafted in 2008.

The text approves procurement subsidies for poor farmers and proposes higher tariff cuts for rich country members.

In a recent meeting of the WTO Committee on Agriculture, Chairman John Adank, however, said he was not too optimistic about reaching a breakthrough on farm issues, including market access and domestic support, by the scheduled July deadline. This is because many other members, including the US, are not happy with the 2008 draft.

“We have the support of almost all developing countries and LDCs (least developed countries), including the large African Group, on building further negotiations on the 2008 text. It suits us as the text talks about exempting farm programmes that support poor farmers from trade-distorting support calculation,” an Indian official told BusinessLine .

Members are working to reach an agreement by July on the agriculture chapter of the work programme, to conclude the Doha Round talks.

The Doha round, which started in 2001 for greater opening up of markets, languished after 2008 due to huge differences over market access issues between developed and developing countries.

The talks got a new lease of life in the Bali Ministerial Meeting in December 2013, when fresh timelines were set to conclude the talks.

The draft 2008 text in agriculture proposes a more than 50 per cent reduction in farm tariffs for developed countries, to be implemented over five years, and about one-third reduction in tariffs for developing countries, over ten years.

“The US doesn’t support the 2008 draft as it says that it imposes a much greater burden on developed countries compared to large developing countries such as India and China,” the official said.

The draft also states that programmes supporting low-income or resource-poor producers should be placed in the ‘Green Box’, which includes subsidies that are non-actionable.

India has been fighting at the WTO, along with other members of the G-33 group of developing countries in agriculture, seeking favourable treatment for the subsidies given under its food procurement programmes so that it is not penalised for breaching existing caps on such sops.

While an interim solution is in place since Bali, which gives immunity to developing countries against action from members on breaching subsidy caps (provided a number of stringent conditions are met), India wants a fool-proof permanent solution.

The proposal on food security floated by India and the G-33 states that while the Agreement on Agriculture of the WTO is changed to place food procurement subsidies in the Green Box, the reference price for calculating the subsidies should be changed (from 1986-88) to make it more current or inflation should be taken into account.

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