‘Rich nations can’t have a say on what suits developing counterparts’

New Delhi

In a stinging rebuttal to ‘rich’ nations questioning its public stock holding programmes at the WTO, India has asserted that its success in feeding a large population demonstrated its understanding of what is best for developing nations at the negotiation table and asked some of the developed members taking a “high moral ground”  on the matter to abandon it.

“Defending its MSP programmes for rice and wheat, the Indian representative cautioned that the success of the WTO’s forthcoming 13th ministerial conference (MC 13) could be hampered by the mindset assumed by some countries propagating that developing nations were not in a position to decide what was good for them,” a Geneva-based trade official tracking the recent WTO Committee on Agriculture meeting said.

MSP Programmes

India and about 80 other other developing country, and least developed countries (LDC) members have already asserted that the focus of the outcome on agriculture at the MC13 in February 2024 should centre around a food security package, with a permanent solution for public stockholding at its core. This solution should provide enough room to developing nations to carry out their MSP programmes without fear of breaching subsidy limits.

Calling out the US, the EU and some others that have been alleging that India’s wheat exports were either harming the food security of other countries or distorting trade, New Delhi pointed out these countries had not shown any evidence backing it. “India also gave examples from the use of its rice stocks during the two years of Covid-19 pandemic and said that its public stockholding programme was mainly for securing  local supplies by providing approximately 56-57 million tonnes of rice to over 800 million people,” the official said.

Developing nations, including India, have been seeking either the removal of the existing 10 per cent cap (on production value) on food procurement subsidies, or calculation of the caps based on more recent External Reference Price (instead of 1986-88) to make it more realistic. 

Ensuring Food Security

While the Bali `peace clause’ under the interim solution reached in 2013 offers protection to developing nations against legal actions in case of subsidy cap breach, it comes with onerous conditions related to notification obligations and ensuring food security of other countries which makes it precarious. 

India has already used the peace clause for its rice MSP subsidies as they breached the capped levels but it has been constantly been questioned by several developed nations on reporting parameters.

“India’s efforts to expand the Bali interim decision has been questioned for long by members such as the US, EU, Australia. They argue that this expansion has helped India assume a  dominant position in certain food markets, particularly after it breached the subsidy level for rice during the marketing years 2018-2019 and 2019-2020,” the official said.

At the meet, the EU reiterated its support for India and the proponents’ attempt to find a permanent solution to the public stockholding issue. It, however, highlighted the importance of transparency in further discussions on the topic.

The US asked India and other proponents to provide more information and answer outstanding questions so that members can better understand the problem. 

India argued that to ensure transparency, members should discuss how to update the External Reference Prices (ERPs). These ERPs are crucial for the negotiation as they will determine whether payments on stocks constitute subsidies.

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