Fortifying food security

WTO norms should be made more realistic

India has made a strong and well-founded plea at the special session of the agriculture committee of the World Trade Organization (WTO), held in Geneva last week, for finding a permanent solution to the issue of farm subsidies and public stockholding for food security. This matter has been hanging fire since the inception of the WTO’s Agreement on Agriculture (AoA), which had prescribed an irrational outer limit for farm subsidies of 10 per cent of the value of crop production, based on the prices prevailing between 1986 and 1988. Any outgo on agricultural support in excess of this cap is deemed trade-distorting. However, an ad hoc relief measure was stipulated for the developing countries during the WTO’s ministerial summit at Bali in 2013 in the form of the “Peace Clause”, which shielded them against penal action for breaching this ceiling. India has often had to take refuge under this Clause because of large stock accumulation due to its market and farm-income support policies entailing open-ended crop procurement at minimum support prices.
 

The legitimacy of India’s demand for an enduring solution to the food-stockholding issue is validated by the backing it has received from countries with as diverse domestic food-security profiles as those of China, South Africa, Egypt, Sri Lanka, and many other African and Asian nations. Adequate stock holding, and price support for farmers as an incentive to raise production, are imperative for developing countries to address their basic food-security needs. Little wonder, therefore, that the developed countries’ bid to evolve alternative food-security arrangements — other than the public stockholding and special safeguard mechanisms like the Peace Clause — has been effectively blunted by the developing countries. Any alternative plan has, for obvious reasons, to be better, and more practical, than the present Peace Clause-based interim arrangement.
 

Actually, the AoA is inherently flawed. It limits the developing countries’ elbow room for extending price support for farm commodities and restricts their policy space for taking up food-security programmes for the teeming poor. Relentless food inflation has rendered the existing food-stocking and farm-subsidy norms totally unrealistic. In fact, the need for public stockholding has steadily soared in view of the exacerbated uncertainties about food production and global supplies due to climate change and geo-political factors, such as the Russia-Ukraine conflict. There is, therefore, need to revisit the AoA, more particularly the formula mooted under it for computing food subsidy. The reference price period, pitched currently at 1986-88, has become out of date and needs to be brought closer to the present time.
 

Ideally, the benchmark prices should be revised periodically, taking the average prices of the previous five years into account. The food subsidy ceiling of 10 per cent, too, needs to be re-worked. Besides, the food security-oriented programmes launched by various countries after the introduction of the Peace Clause in 2013 should also be factored in while assessing the aggregate measure of support to agriculture. It is from this standpoint that the proposal made jointly by India, China, and several other countries for text-based negotiations for fixing the agenda for the next WTO ministerial meeting scheduled to be held in February 2024 in Abu Dhabi (in the UAE) seems worthy of acceptance by all members of the WTO.