WTO deadlock: Is India‘s Food Security Act in jeopardy?

UPA II’s biggest social security programme, the Food Security Act could be under jeopardy due to international pressure on India to sign a diluted global pact under the WTO umbrella. The global pact on food security is a key agenda item in WTO’s Bali ministerial meet scheduled to be held in first week of December, reports CNBC-TV18’s. Rituparna Bhuyan.

The genesis of the global pact lies in a proposal by India and some other developing countries – a group known as G 33 -  which wanted relaxation from present GATT rules. The G 33 wanted a binding commitment from WTO members that poor and developing countries should not be dragged in to disputes, if they exceed the allowed level of subsidies on food. Also read: Spectrum auction: EGoM accepts Telecom Panel suggestions According to the global Agreement on Agriculture (AoA), most developing nations are allowed a ‘de-minimis’ subsidy of 10% of production. However, India has exceeded this level of subsidy. According to sources, the G 33 has been offered a peace clause, through which only a four year window has been offered in which violations on AoA will not be challenged. Moreover, the peace clause doesn’t include relaxations under on Article XVI of GATT 1994 (subsidies); as well as Agreement on Subsidies and Countervailing Measures (ASCM).  As a result, WTO members could still complain against countries like India, in the four year period, if they feel that food subsidy by India was distorting global trade. If the diluted provisions get accepted, India could have problems in implementing the Public Distribution System (PDS) as well as Minimum Support Price (MSP) regime for government procurement of crops produced by its farmers. While the G 33 proposal has been facing stringent opposition from rich countries that includes US and EU, sources told CNBC-TV18 that negotiators in Geneva based WTO are facing immense pressure to agree to the diluted global pact on food security. “India will need to take a political call on if to accept the diluted clauses, that could impact India’s public procurement programme, which in turn could impact social security programmes like the food security act,” said a government source in the know.