Food security at WTO: CommMin places 3 options before Cabinet

The government is likely to firm up on Thursday India's strategy to be taken at WTO Ministerial in Bali in December to ring fence its food security plan.

New Delhi: The government is likely to firm up on Thursday India's strategy to be taken at WTO Ministerial in Bali in December to ring fence its food security plan.

"The Commerce Ministry is going to the Cabinet Committee on WTO with three options" but the bottom line is that India will not compromise on its stand that it should be allowed to provide subsidised food to all poor and offer the minimum support price to farmers even if the 10 percent ceiling on farm subsidy as provided in the WTO is breached, sources said.

In return to securing its food security plan, India may even dilute its tough stand on the proposed Trade Facilitation Agreement (TFA) which will make international trade much easier by simplifying and streamlining custom procedures across the globe, sources said, adding that the pact is billed to bring in gains worth USD 1 trillion for global trade.

The Cabinet Committee on WTO is scheduled to deliberate tomorrow on India's stand to be taken at the forthcoming WTO's Ministerial Conference in Bali, starting from December 3.

The Ministry has forwarded three options, including agreeing to a four-year 'peace clause', but with the condition that the "interim solution (four-year peace clause) must remain in force until a permanent solution is reached", sources said.

This proposal would protect India's food security plan from WTO penalties even if 10 percent subsidy cap is breached. If it is accepted India would endorse TFA.

Under the peace clause, a WTO member gets immunity against penalty for breaching the food subsidy cap. It would allow also India to procure foodgrains at the MSP and sell it at subsidised rates through the public distribution system.

As per the WTO norms, a developing nation can provide food subsidy of up to 10 percent of the total farm output.

Besides, the Commerce Ministry has also proposed that India ask for protection from challenges under the WTO agreements on subsidies and countervailing measures (ASCM).
"At present, no protection under the ASCM is available. The protection ended in 2004," another source said.

This proposal, however, are likely to face stiff opposition at WTO, officials said.

"In such a situation, considering India's consistent stand on a fair Bali package, it may not be desirable to endorse the TFA. In that case, it is likely that India may be blamed for a failure at Bali," sources said.

The third option says that "the interim solution must be available until a permanent solution is reached through the post-Bali work programme".

However, sources said "this option is slightly diluted vis-a-vis the second option as the ministry is not explicitly seeking an interim solution of indefinite duration but only through a review and post Bali work programme".

India's Food Security Act entitles 82 crore people to 5 kgs of foodgrain per person in a month at the rate of Rs 1-3 per kg. The country needs 62 million tonnes of foodgrain in a year to implement the law.