India seeks permanent WTO safeguard on farm support

Decides against accepting 'peace clause' that guarantees only 4 years of interim relief

The government has decided not to accept the proposed ‘peace clause’ until a permanent safeguard measure is provided to give it the freedom to extend to its farmers subsidies prohibited under the World Trade Organization (WTO).

On Monday, the Cabinet Committee on WTO Matters, under Prime Minister Manmohan Singh, will firm up a strategy on these lines. At the coming ministerial conference in Bali, India will not give its consent to the agreement on trade facilitation, which was primarily backed by developed countries, until it was assured of a permanent solution on farm support, one that would form the basis of the negotiating mandate, a commerce ministry official told Business Standard.

“There is no way India will agree to a peace clause that guarantees only four years of interim relief. We need to be completely assured of a permanent solution for millions of our farmers,” the official said.

DIVERGING VIEWS

• For countries providing subsidies prohibited under the WTO, the ‘peace clause’ ensures immunity from trade disputes for a stipulated period
• In 2008, the G-33 floated a proposal on food security
• Developed countries have rejected all the suggestions in the proposal from being considered in Bali, except for the peace clause

For countries providing subsidies prohibited under the WTO, the peace clause ensures immunity from trade disputes for a stipulated period.

Even as India firms up its strategy on the controversial peace clause, the Geneva-based WTO has already finalised a negotiating draft text, based on which trade ministers from 159 member countries will discuss the road ahead.

In 2008, the G-33, a coalition of developing countries, floated a proposal on food security, wherein it demanded public food programmes for supporting the livelihoods of small farmers and food consumption of the poor should be allowed without limits by changing the existing Agreement on Agriculture under WTO.

However, developed countries have rejected all the suggestions in the proposal from being considered in Bali, except for the peace clause.

“The opposition of developed countries is unjustifiable in the light of existing asymmetries between developed and developing countries. For instance, in 2010, the poor in India received an average of only 58 kg a person, 3.1 times less than the 182 kg/person of cereals food aid to 80 million beneficiaries in the US. This was also 4.2 times less than the 241 kg for each of the 46.6 million beneficiaries of the Supplemental Nutrition Assistance Program in the US,” said Jacques Berthelot of France-based non-governmental organisation Solidarite.