New developments in farm trade talks are positive steps: CUTS

February 20, 2013, Jaipur
“It is encouraging to note that the WTO Members are making attempts to re-vitalise the Doha Round of negotiations by taking some forward-looking steps on crucial areas such as agriculture,” said Pradeep S. Mehta, Secretary General, CUTS International, a civil society organization working on public interest issues of international trade, economic regulations and good governance. He was reacting to the news that trade negotiators are looking at how countries should handle food stocks and two recently submitted proposals by the G-20 and G-33 group of developing countries. India is a member of both G-20 and G-33 group.

“These proposals should be used as building blocks to outline a deal on agriculture by providing developing countries more flexibility in their policies to maintain and enhance food security. A balanced deal (on agriculture) will boost confidence about the multilateral trading system among the WTO Members and may help in breaking the logjam in other contentious areas,” he added.

While the G-20 proposal was about administering tariff rate quotas in agriculture trade, the G-33 proposal calls for new rules on public stockholding for food security purpose and on domestic food aid by seeking special treatment to protect their poor farmers.

As per this proposal, if a developing country government purchases – ‘procured generally’ food at administered prices and for maintaining public stock in order to support ‘low-income or resource-poor producers’, that should not be counted as part of their aggregate measure of support to agriculture. It also seeks exemption from any ceiling on subsidies for farm support programmes for rural development and rural livelihood by classifying them under ‘Green Box’ support which cannot be challenged.

These proposals, coupled with a questionnaire circulated by the WTO Secretariat to the WTO Members requesting them to provide data on public stockholding for food security, domestic food aid programmes, and export credits, export guarantees and insurance programmes, are expected to provide additional information on their food security measures which are currently unavailable from their notifications.

Both developed- and developing-country members are cautious on these proposals and evaluating them critically. Some of them have indicated that the lack of an agreed definition of ‘procured generally’ and ‘low-income or resource-poor producers’ may make it harder to ensure that support was being targeted toward the most vulnerable farmers.

The tabled proposals and the series of technical meetings are crucial for India because while its farm subsidies grew substantially in recent years, almost 99 per cent of land-holdings fell under ‘low-income or resource-poor producers’ as per its recently submitted farm subsidy notification to the WTO.

The notification further points out that a considerable portion of India’s Green Box subsidies were allocated to food grain procurement for buffer stock operations, which is categorised as ‘public stockholding for food security purpose’. This will have important implications on India’s policy to significantly expand the current level of provision of subsidised food to its poor and other vulnerable sections of the society as per the national food security bill, which is pending before the Parliament.

In early December this year, the WTO Members will meet at Bali, Indonesia at a Ministerial Conference to take stock of progress on the Doha Round of negotiations and discuss other important issues facing the multilateral trading system. There is a view among some WTO Members that there should be an ‘early harvest’ deal at Bali, particularly on trade facilitation. India and many other developing countries are of the view that the possibility of such a deal would depend on how ‘balance’ the draft Bali negotiating text is with their development concerns including but not limited to those related to trade facilitation.

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