India, Indonesia, China, Nigeria and South Africa have raised the pitch for a standalone permanent solution for public stockholding and MSP programme at the WTO asserting that their joint proposal, representing 6.6 billion people and over 80 per cent of the global population, needed to be the guiding framework for a resolution at the 13th Ministerial Conference (MC) early next year.
“At the on-going two-day agriculture negotiations at the WTO (July 17-18), New Delhi underlined that its actions during the pandemic and success in feeding 80 million people provided the strong evidence on the necessity of public stockholding (PSH)”, according to a Geneva-based trade official.
The UK, the US, the EU as well as some members of the Cairns’ group of agriculture exporting countries such as Australia, Canada Paraguay, Uruguay and Costa Rica, however, continued to dilly-dally on the matter arguing that without caps, PSH subsidies could lead to market distortion.
External reference prices
The group of developing nations and LDCs also stressed on updation of the external reference prices (ERP) used for calculating market price support in PSH, which dates back to 1986-88 reference prices. “Making the ERP more current will give a truer picture of the subsidies and bring it down substantially, keeping it below the caps in most cases,” another official pointed out.
It is very important for India and many other developing nations and LDCs, who support their poor through MSP and public distribution or other similar programmes, to get a permanent solution on public stockholding as under the WTO rules a country can be penalised by another if the subsidy for procurement of any crop exceeds 10 per cent of the production value. A permanent solution could allow them to continue their programmes without threat of action.
Also read: Centre hikes kharif crops’ MSP by 5-10%; does not see impact on inflation
Although, the Bali interim agreement, reached in 2013, provides developing nations immunity against action from other countries in case of subsidy breach, there are stringent requirements attached to the use of the peace clause such as compulsory submission of extensive procurement-related data and conditions such as the subsidies not harming the food security of another country.
“To make things worse, many developed nations are also wanting the interim agreement to end without offering a satisfactory permanent solution to poorer nations. This is being made very clear at the on-going meeting,” the second official said.
India, which has invoked the peace clause for rice since its subsidies went beyond the 10 per cent cap, is at the receiving end of constant questioning and demand for more data from certain WTO members, he added.
Indonesia spoke on behalf of the co-sponsors of the joint document at the on-going WTO meet with China, Nigeria (representing the African Group), India, and South Africa pitching in and demanding that text-based negotiations should immediately start, the Geneva-based official said. “They said that reaching a permanent solution had been postponed for long and members must fulfill the mandate at MC 13 in February next year,” the official said.