Policy

Developed members say India can’t have permanent solution to MSP issue at WTO Ministerial meet

Amiti Sen New Delhi | Updated on June 25, 2021

India’s attempt to get a permanent solution on public stock holding and MSP pay-outs at the WTO Ministerial Conference (MC 12) in November this year is faced with a sudden roadblock with some developed countries including Canada, the EU and Australia asserting that differences remained too wide for an agreement to be reached within the available time, a Geneva-based official has said.

New Delhi, however, is not willing to give up and has said that it will produce an option paper on a standalone permanent solution with less burdensome transparency requirements together with China, Indonesia, the Philippines and Nigeria.

“It is not just the group of developed members but also the facilitator for the talks on special safeguard measures (SSM), Renata Cristaldo Oviedo from Paraguay, who said that because of political and technical complexities, no outcome could be expected at MC12. But the Chair for the negotiations said she is committed to helping members bridge the gaps and will arrange more consultations with members,” the trade official said.

WTO rules

At present, the WTO rules in the area of farm subsidies are skewed against developing countries like India that have a large number of poor farmers to support as the pay-outs for MSP are included in the prohibited subsidies that can’t exceed 10 per cent (de-minimis level) of the value of production. India and its fellow-developing country members in the G-33 alliance, want MSP to be excluded from the list of trade distorting subsidies. Moreover, the reference price for calculating the subsidies is fixed at prevailing 1986-88 international prices, which, India says, must be updated.

India did manage to get a peace clause agreed to at the Bali Ministerial Conference (MC 10) that laid down that breach of subsidy levels will not invite sanctions against member countries till a permanent solution is found to the issue of public stock holding (preferably by 2017). But there are so many conditionalities and paperwork attached to it that developing nations fear that it may prove to be useless if the subsidies are actually challenged.

“India has already breached the de-minimis level for rice while some countries are alleging that it may have also done so in wheat and cotton and demanding copious data. It is very clear that a permanent solution must be reached soon if future harassment is to be avoided,” a government official said.

Option paper

In the option paper on a standalone permanent solution that India is working on, there will be suggestions to lessen the transparency burden that is being placed on developing countries that are running public stockholding programmes and giving MSP to its farmers, the government official added.

The MC 12 is scheduled in Geneva from November 30 to December 3, 2021, where members are hopeful of reaching agreements on elimination of harmful fisheries subsidies and checking agriculture subsidies.

Published on June 25, 2021

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