India toughens stance on food subsidy at WTO | business | Hindustan Times
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India toughens stance on food subsidy at WTO

business Updated: Jul 21, 2014 00:32 IST

India has made it clear that state-funded welfare schemes for the poor are non-negotiable, and it is willing to take the blame for delaying the World Trade Organisation’s (WTO’s) “trade facilitation” agreement rather than hurt the interests of small farmers.

Ahead of the WTO’s two-day General Council Meeting that begins on Thursday, India has worked out a hard bargain strategy for drawing up a permanent solution on food subsidies.

India will seek a postponement of the trade facilitation agreement (TFA) to December 31, from July 31 agreed upon at WTO Bali ministerial last December. The TFA seeks to speed up procedures and make international trade easier and cheaper.

India will also insist on implementing the TFA only as a part of a single undertaking that includes a permanent solution on food security, top government sources told HT.

Existing rules cap the value of food subsidies at 10% of the value of production. But the support is calculated at prices of more than two decades ago, not at current prices.

According to Indian trade negotiators, developed countries are pressing for early adoption of the TFA, which would give them greater market access, but are avoiding discussions on issues such as public stockholding of cereals for food security.

“India’s concern is that once the TFA is implemented, none of the developed countries is likely to come back to the negotiating table to discuss food subsidy or any of other non-binding outcome of the Bali ministerial,” a top government official told HT, requesting anonymity.

“The only way to force action was to slow down the implementation of the decision on trade facilitation and the only time to do it was before the General Council adopted the protocol of amendment,” the official said.