NEW DELHI: The Group of 33 developing countries, including India and China, has proposed to include procurement of food products from farmers at minimum support price (MSP) and their distribution at subsidised rates to poor in the global rules of agriculture. Subsidies on account of these programmes should not be included in the category of trade distorting subsidies that disrupt markets and prices of food items, the grouping has said in its proposal on permanent solution on public stockholding  for food security.

 

G33 includes 47 developing and least developed countries. It has called for an amendment in the Agreement on Agriculture of the World Trade Organisation (WTO) because current rules suggest a fixed subsidy of 10% for food procurement from farmers to feed the poor. The existing rule also uses an old methodology for subsidy calculation that does not account for inflation and is based on a price index of 1986-88, it said.

 

The new G33 proposal is based on a submission the group tabled in 2015 proposing insertion of a new annex to the Agreement on Agriculture. The annex in the draft legal text says public stockholding (PSH) programmes for food security purposes would be exempt from subsidy reduction commitments.

 

Public stockholding is a policy tool used by governments to purchase, stockpile and distribute food when needed. While stocking and distributing food is permitted under WTO rules, governments purchasing food at prices higher than market prices are considered to be subsidising their farmers.

 

Indonesia, which is the chair of G33, circulated the proposed permanent solution on public stockholding for food security in July.

 

Public stockholding for food security is critical for developing countries where agriculture is dependent on rains, agricultural markets are imperfect and they provide subsidised food grains to their poor.

 

A new element in the G33 proposal is a requirement for countries that use such programmes to share more information. It mentions both urban and rural poor whose food security requirements need to be met.

 

This is the second submission by India to the WTO in the last two months as it seeks to bring the Doha Development Agenda at the forefront ahead of the mini ministerial conference of select WTO countries in Marrakesh on October 9-10 to decide the agenda for the December meet in Argentina.

 

It also wants to get fulfilled the mandate on PSH from the Bali and Nairobi Ministerial meetings.

 

Finding a permanent solution is also important as the peace clause that exempts developing countries from penal action for violations comes to an end this year.

 

In July, India had challenged a major flexibility given to developed countries whereby they can concentrate their subsidies to a few farm products, which allows them more policy space and causes distortions in global agricultural trade.

 

 

 

Soures : economictimes.indiatimes.com