One man’s fixation with rules can be another man’s lifeline. Many international trade negotiators argue in favour of shooting down subsidies because it ‘distorts’ trade.
But the simple fact is that in a more-than-a-billion strong nation, in which nearly one in every three lives at subsistence level, one needs an effective and efficient method through which privileged tax payers can support the poor.
India has rejected a proposal at the World Trade Organisation (WTO) conference that can potentially harm the country’s small farmers as ministers battled it out to end a protracted deadlock over negotiations to set up a rule-based global trade regime.
Developing countries want a deal to allow them to increase their ceiling on food subsidies above what is permissible currently as well as a package for the least developed countries.
India has firmly placed its recently launched food security scheme at the core of the ongoing WTO’s ministerial conference in Bali making it amply clear that it would not be willing to agree on a global trade regime that could potentially hinder the roll-out of the flagship welfare programme.
In the absence of a broad-based agreement on the Doha round of trade talks that started in 2001, member-countries are making a fresh attempt to build a consensus for laying down the rules of global trade.
Developed nations have shown support for a “peace clause” that would agree to developing countries’ demands on food security for a period of four years, but India, very rightly, has pressed for a guarantee for further exemption until a permanent solution is negotiated.
India has been pressing the WTO to find a way to allow developing countries the right to provide higher levels of food subsidies for their poor beyond these four years.
India’s stance has faced strong headwinds in Bali with the developed countries, as expected, opposed to a lasting agreement on food security.
One of the primary objectives of subsidised entitlements to the poor is to address concerns of equity. Otherwise, there would not have been the need to legislate subsidised meals for the poor.
India still has a long way to go before it can get food into every mouth that needs it. The Food Security Act may well mark the beginning of this long journey.
To that extent any subsidy programme is critical, especially for a middle-income country such as India. New Delhi’s strong pitch for the protection of subsistence farmers underscores the fact that any multi-lateral system must have a fair and balanced outcome, which addresses the concerns of equity among rich and poor nations.