India will not budge on its demand for a permanent solution to the problem of public stockholding for food security at the WTO’s 13th Ministerial Conference (MC13) in Abu Dhabi next month and will negotiate in other agriculture-related areas, such as domestic support and export restrictions, only after it secures an agreement on the vexed issue, a senior official has said.

This follows the US’ assertion at a WTO meeting on agriculture earlier this week that it would be impossible to meet India’s demand for a permanent solution for public stockholding for food security at MC13 as there was no consensus on it.

“The Nairobi Ministerial in 2015 had given a clear mandate that the permanent solution for our public procurement or MSP programme has to be negotiated first. Without it, we will not take part in any other issue on agriculture,” the official said.

The Bali Ministerial decision of 2013 had allowed developing countries a peace clause invoking which they can breach WTO prescribed agriculture subsidy limit of 10 per cent of value of production. But India and about 90 other members, including African nations, the ACP group and the  G33 coalition of developing nations, want a permanent solution as the peace clause comes with a number of onerous clauses such as notification requirements.

‘Permanent solution’

“Because of the peace clause, we cannot be legally challenged at the WTO but we want a permanent solution to be codified in the Agreement on Agriculture,” the official said. A permanent solution is likely to do away with the requirement of meeting many of the clauses and could also help developing nations expand their MSP programmes to include newer items.

Through a permanent solution for PSH, India and other developing countries want to make the AoA more balanced as it allows many developed countries to maintain high subsidies for several crops through special entitlements but puts limits on the expenditure on MSP programmes that feed the poor, the official added.

The argument being used by the US and the Cairns group, which includes agriculture produce exporting countries such as Australia and New Zealand, against a permanent solution is 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.

New Delhi has been arguing that the food procured through its MSP programme was only used to feed the poor population and none of it was exported.

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