November 29, 2023

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No progress at WTO agri talks; stockholding issue eludes consensus | Business News

2 min read

The negotiations at the World Trade Organization’s (WTO’s) mini-ministerial meeting on agriculture this month failed to make expected progress as politically sensitive issues such as public stockholding for food security and domestic support for farmers continue to divide the developed and developing nations such as India.

This assumes significance for New Delhi as its public stockholding (PSH) programme was challenged by large food grain exporters such as the US and Canada on the grounds that it is highly subsidised, especially for rice, and that this is distorting the global foodgrain market. India is the largest rice exporter in the world.

Arguing against this, India along with the G-33 grouping, a coalition of developing countries, and African nations is seeking a permanent solution for domestic food security that would give them the flexibility to give out higher farm support. As per WTO norms, agri subsidy should not exceed 10 per cent of the value of agricultural production for developing countries.

However, India’s subsidy on rice has exceeded the threshold on multiple occasions forcing it to invoke the ‘peace clause’ agreed during the Bali ministerial in 2013 which allows developing countries to breach the 10 per cent ceiling without invoking legal action by members. Developing nations have questioned the subsidy calculation.

Earlier this year, Finance Minister Nirmala Sitharaman at the Asian Development Bank’s annual general meeting said that WTO must revisit the prickly issue of food and fertilizer subsidies as both have become critical to developing economies which are not taken into account while deciding tariff and pricing rules.

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As per a statement on Wednesday, WTO Director-General, Ngozi Okonjo-Iweala said “Senior Officials Meeting held at the WTO on 23-24 October clearly recognised that the ongoing agriculture negotiations have failed to achieve the progress members have called for.”

To break the ongoing logjam the United Arab Emirates, the host of the upcoming 13th Ministerial Conference (MC13) scheduled in February 2024 “urged ministers to provide political guidance to agriculture negotiators” in the run-up to the ministerial conference.

Moreover, WTO’s General Council Chair, Ambassador Athaliah Lesiba Molokomme emphasized that the “higher-level political guidance is imperative to inject decisive momentum into [agriculture] negotiations and untangle the
thorniest issues, particularly public stockholding for food security purposes and domestic support, given the high level of political
sensitivity around them.”

Stressing the importance of the agriculture negotiations ahead of MC13, UAE’s foreign trade minister Thani bin Ahmed Al Zeyoudi said that the farm sector faces numerous challenges, including growing food insecurity due to adverse weather events, the COVID-19 pandemic and conflicts and that we are “at crossroads”

“The food security package achieved at MC12 constituted a significant emergency response, but far more remains to be done to structurally address the expected devastating impacts of climate change and how to feed sustainably and equitably a growing world population which is estimated to reach 10 billion by 2050. The sector also has to adapt as it is a significant source of greenhouse gas emissions,” Zeyoudi said in the official statement.

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