New Delhi: Admitting that India runs the risk of breaching WTO's permissible food subsidy limits, Commerce Minister Anand Sharma has said the government would endeavour to work out a solution in the forthcoming Bali meet to protect interest of the country's farmers and poor people.
"India will ensure that our national interest including those of our subsistence farmers in the poor and vulnerable sections of the society are fully protected.
"We have made it abundantly clear that we will not accept any conditionalities in the peace clause and all parties must commit to work effectively for a post-Bali work programme," Sharma said in a letter to leaders of parliamentary parties.
The 9th WTO Ministerial Conference will be held in Bali from December 3-6.
The G-33 nations, a group of emerging countries including India, are demanding amendment in the WTO's Agreement on Agriculture (AoA) in order to implement the food security plan without attracting any penalty even after breaching the minimum subsidy cap.
As per the WTO norms, a developing nation can provide food subsidy of up to 10 percent of the total farm output.
"For India's stand point, (the) important proposal relates to food security which has been tabled by the G-33. India has been a key proponent of this proposal.
"The need for this proposal essentially evolves out of an unrealistic reference price fixed in the AoA for calculation of subsidies involved in maintaining minimum support price (MSP) for procurement to maintain public stock holding.
"Since India has a large public procurement system based on MSP, we run the risk of breaching the permissible support levels in the near future," the letter said.
According to sources, India is likely to agree for a four-year "peace clause", which will provide immunity against penalty for breaching the food subsidy cap. It would allow the government to procure foodgrains at the MSP (Minimum Support Price) and sell it at subsidised rates through the public distribution system.
The "peace clause" would apply to all staples, which was also the country's demand.
India is in the process of implementing the Food Security Act, which entitles 82 crore people to 5 kgs of foodgrains per person in a month at the rate of Rs 1-3 per kg. The country needs 62 million tonnes of foodgrains in a year to implement the law.
Sharma said India has raised the fundamental issue pertaining to public stock holding and domestic food security programme and have underscored that this is of critical importance for India, especially in the backdrop of the National Food Security Act, placing statutory obligations on the country for providing subsidised food grains for poor and vulnerable sections of the society.
Developed countries like the US and Canada have raised concerns over India's food security legislation at the WTO. They have asked India to explain the effect of the law on global stocks and commodity prices.
"India has made it abundantly clear to US, EU that a package on food security is a non-negotiable for India, given the interest of millions of subsistence farmers in the rural areas and also the weak and vulnerable people of our country," Sharma's letter said.
"I have underscored the need of arriving at an interim understanding which can be termed as peace clause since a final AoA is difficult given the short window of time. This is important to ensure that India and countries which are similarly placed are not faulted to breach of WTO obligations," it added.
The Indian Commerce Minister also said all stakeholders should remain actively engaged in negotiations for a permanent solution and take stock in the next ministerial conference with an endeavour to finding a final solution by the 11th ministerial conference.
Sharma expressed confidence that India would be able to persuade the US and EU for achieving a fair outcome on the agriculture package.
"A positive outcome at Bali is desirable to retain the credibility of WTO as an institution," he said in the letter.
The Cabinet Committee on WTO is likely to discuss the country's stand on the issue on Monday.
Further, Sharma has mentioned that a key outcome of the negotiations in WTO is an agreement on trade facilitation.
The agreement aims at reducing procedural hurdles at the borders. It would help in reducing transaction cost for exporters and importers.
For a global trade deal, the Doha Round of talks under the aegis of WTO has started in 2001 but no breakthrough has been achieved due to major differences between developed and developing countries on the issues like providing protection to poor farmers and duty cut on industrial goods.
First Published: Saturday, November 23, 2013, 19:42