The US has said that it will be impossible to meet India’s demand for a permanent solution for public stockholding for food security at the 13th Ministerial Conference (MC13) of the WTO in Abu Dhabi next month, according to Geneva-based trade officials.

“Washington’s point blank refusal followed a representation made by India at the WTO agriculture meeting on Tuesday, where it emphasised that public stockholding (PSH) has to be dealt with separately on a fast track without linkages and delivered at MC13,” the official told businessline.

India sought to refresh WTO members memory about the 2013 Bali Ministerial Decision and the 2015 Nairobi Ministerial Decision, where there was a clear mandate for PSH negotiations to be held on an accelerated, separate track.

The Bali Ministerial decision has already allowed developing countries to invoke a peace clause under which they can breach the WTO-prescribed agriculture subsidy limit of 10 per cent of the value of production. But India and other members of the G33 coalition want a permanent solution, as the peace clause comes with a number of onerous clauses. These include the submission of data related to production and procurement and ensuring that the measures do not affect the food security of other vulnerable nations.

New Delhi, which has invoked the peace clause for its MSP subsidies for rice, is already at the receiving end of relentless questioning at the WTO, where several members, including the US, are asking for more data notifications. A well-negotiated permanent solution could allow it much greater flexibility to increase its MSP pay-outs and also expand the programme to newer products if needed.

At the WTO meet, the US stated that the Bali decision had caused detrimental consequences over the past decade and indicated that the interim solution enabled India to become the biggest rice exporter. “The US emphasised that food stocks bought at government-administered prices were trade-distortive subsidies, and there was no reason why they should not be part of the overall agriculture negotiation framework,” the official said.

The Cairns agriculture exporting members, including Australia and New Zealand, and the European Union, all supported the argument that public stockholding at administered prices gives countries such as India an unfair competitive advantage in trade, contradicting the WTO’s principles of open and fair trade, the official added.

Washington suggested that the best scenario would be to arrive at a consensus at MC13 on a procedural step where all PSH advocates could agree to provide the necessary data for further discussions.

India, as part of the G33 coalition, had earlier submitted a joint proposal proposing that domestic support provided by a developing country member for PSH programmes should be considered compliant with the WTO’s AoA (Agreement on Agriculture) rules and not subject to reduction commitments.

Where such programmes included the acquisition and release of stocks of foodstuffs at administered prices, the AMS (agriculture subsidies) should be calculated based on the actual quantity of foodstuffs (as opposed to the entire eligible production) acquired at administered prices, it added.

The submission also stated that the ERP (external reference price) for calculating the subsidy element should not be pegged to 1986-88 prices as it leads to inflated subsidy calculations because existing international prices are much higher. Instead, it should either be the three-year average price based on the preceding five-year period, excluding the highest and lowest entries for that product, or adjusted for excessive inflation as per the methodology, the proposal said.

comment COMMENT NOW