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Business News/ Politics / Policy/  India now eyes end to restrictions on food plan
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India now eyes end to restrictions on food plan

Government set to fight to remove curbs on future food programmes while negotiatingapermanent solution at WTO

Developing countries oppose a WTO rule that caps subsidies to farmers at 10% of the total value of agricultural production based on 1986-88 prices. Photo: MintPremium
Developing countries oppose a WTO rule that caps subsidies to farmers at 10% of the total value of agricultural production based on 1986-88 prices. Photo: Mint

New Delhi: Emboldened by its success in making the interim solution on food stockholding under the rules of the World Trade Organization (WTO) open ended, India will put forth a proposal to do away with the restrictions imposed on a country’s food programme under the Bali agreement.

Strict disclosure norms and the provision that a country cannot launch any new food programme under the Bali pact are considered to be against the interest of developing countries, making it difficult for them to access the exemption.

“We will fight to remove such restrictions on our future food programme, while negotiating the permanent solution," a commerce ministry official said on condition of anonymity.

WTO approved the first global trade deal in its history in November, ending a four-month impasse after India and the US resolved their differences over public stockholding of food.

The deal incorporates India’s stand that a temporary solution on public stockholding for food security reached at Bali last year will continue indefinitely and not just for four years, as agreed earlier. While a deal at Bali in December last year on the least-contentious issues of the Doha negotiations, such as trade facilitation and public stockholding, seemed to have ended the deadlock at multilateral trade negotiations, Prime Minister Narendra Modi’s government opposed the deal, calling it “unbalanced" because it failed to take care of the concerns of developing nations on food security.

Developing countries oppose a WTO rule that caps subsidies to farmers at 10% of the total value of agricultural production based on 1986-88 prices. They point out that the base year is now outdated and they need to be given leeway to stock enough foodgrain to ensure food security for millions of their poor.

Though the four-year limit on the interim solution has been lifted, the strict annual disclosure norms on a member willing to access the reprieve under the interim solution still stays. More importantly, the pact bars such members who have accepted to have breached the limits from announcing any new food programmes. This would mean India will not be able to launch any new food scheme even though it has an unending reprieve at WTO once it accepts it has breached the food subsidy limit.

India must consolidate its position at the WTO now and must renegotiate the onerous restrictions put by the Bali agreement, said Biraj Patnaik, principal adviser to the supreme court commissioners on the right to food.

The commerce ministry official said India will not breach the WTO limits on food procurement at least for another five years. India announces minimum support prices for as many as 23 crops but the subsidy is largely restricted to rice and wheat, where the amount of government procurement is huge.

India’s subsidies for wheat remained in the negative, against the prescribed limit of 10%.

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Published: 21 Dec 2014, 11:54 PM IST
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