The recently concluded G20 summit in Rome may have been overshadowed by the ongoing COP26 summit that came just after it, but officials said New Delhi’s dedicated push to ensure food security and stable farm incomes at Rome will soon bear fruit.
On the issue of sustainable development and food security, India has emphasised that policies must protect interests of small and marginal farmers, and conserve local food cultures which, in turn, will contribute significantly to food security. The topic has found mention as a key part of overall sustainability and food security, one of the priority areas chosen by the G20 at the latest meet.
“India’s strong statement on the issue has gained traction before the World Trade Organization’s Ministerial Conference in Geneva later this month, where agriculture remains a point of contention between richer nations and the developing world,” a senior official said.
India and other developing nations run major public stockholding programmes to purchase, stockpile and distribute foodgrains to people in need. Richer economies say some stockholding programmes are considered to distort trade when they involve purchases from farmers at prices fixed by the governments, such as India’s minimum support price programme.
The WTO currently has a ‘peace clause’ that permits uninterrupted implementation of India’s food security programme till a permanent solution is found. This allows the country to procure and stock foodgrain for distribution to the poor without being penalised by WTO members even if it breaches the 10 percent subsidy cap prescribed by the multilateral trade body.
For a permanent solution, India has proposed either amending the formula to calculate the food subsidy cap of 10 percent, which is based on the reference price of 1986-88, or allowing such schemes outside the purview of the subsidy cap.
With increasing support from the key G20 members, along with India’s traditional allies, on the issue from the Global South, farm issues are set to be majorly discussed at the WTO ministerial meet. This will be crucial since all major decisions on global trade legislation happens during the conference, which is attended by trade ministers from all WTO member nations. Global South refers broadly to the region comprising Latin America, Asia, Africa, and Oceania.
The WTO rules in the area of farm subsidies are skewed against developing countries like India that have a large number of poor farmers to support as the pay-outs for MSP are included in the prohibited subsidies that can’t exceed 10 percent (de-minimis level) of the value of production.
As a case-in-point, India provides a subsistence amount of about $260 per farmer per annum, compared to over 100 times more in some developed countries.
On this issue, India last informed the WTO that its farm subsidy did not go beyond the permissible limit between 2011-12 and 2013-14. New Delhi has said that input subsidy, which includes those for fertilisers, irrigation and electricity, fell to $22.8 billion in FY2014, compared with $29.1 billion in FY2011.
These are part of the ‘green box’ or non-trade distorting subsidies that are allowed without limits for countries such as India that have millions of poor farmers.
The senior official quoted above hopes that while the issues have been talked about and subsequently sidelined for a long time, the increasing focus on sustainability at a time of rapid climate change is set to again thrust them into the spotlight.
“India’s consistent arguments on the issue, coupled with greater debate on the rights of farmers in developing nations at COP26, is set to move the scale at the WTO ministerial conference,” a senior commerce department official argued.
The G20 represents 80 percent of the world’s GDP, 75 percent of global trade, and 60 percent of the world’s population, and motions adopted at the G20 summits generally signal wide shifts in global geopolitics that other nations outside the G20 often follow suit on.