The World Trade Organization (WTO) is hosting its 11th ministerial meeting in Buenos Aires, Argentina this month, even as the fate of the Doha Development Round negotiations that began way back in 2001 had remained mired in controversy. With so many issues dear to the interests of the world’s developing and emerging economies stuck in rows, India as a founder member of the erstwhile General Agreement on Tariffs and Trade (GATT), the predecessor to the WTO that began its existence from 1995, is now caught in a peculiar web of its own. The 11th ministerial of the WTO is scheduled to start on December 10, 2017 with India’s commerce and industry minister Suresh Prabhu leading the high-level delegation.
India is fighting fiercely to safeguard the interests of its domestic agricultural farmers and the overwhelming need to sustain its massive targeted public distribution system delivered through its humongous public procurement of foodgrains by its public stockholding programme for food security through the Food Corporation of India (FCI). In the run-up to the Buenos Aires ministerial, countries belonging to the European Union (28 nations minus Britain which has opted out recently but yet to get that settled), Brazil and other nations insisted on linking New Delhi’s fundamental demand for protecting its public stockholding programme for food security purposes with a quid pro quo slashing down of agricultural subsidies being doled out to their own farmers.
Notably, the EU, Brazil and others have sought that the PSH must be finalised along with their proposal for whittling down the overall trade-distorting farm subsidies on a percentage basis. In effect, the EU and its coalition partners on this cause are seeking India and other members of the Group of 33 countries, including China, to make ‘a payment’ for the mandate permanent solution for public stockholding programme by consenting to their proposal on domestic farm support. In trade deals, a payment implies that a country must enter into a tradeoff for an outcome it is seeking by cottoning on to a demand from the other. India’s envoy to the WTO in Geneva told his counterparts at a meeting of the heads of delegation on October 24 that the mandate on a permanent solution is absolutely clear in that there is no linkage and the issues have to be kept on separate tracks.

More recently, in responding to a query in the Lok Sabha on July 31, the former minister of state for commerce and industry, Nirmala Sitharaman, made it abundantly clear that New Delhi has a long-standing position on the need to prioritise the agreed mandate of the Doha Round, in particular the Ministerial Declaration to find a permanent solution by December 2017 on public stockholding for food security purposes, which pertains to protection of foodgrain programme at minimum support prices and subsidised distribution to economically weaker sections of society. She further clarified that the Government of India is committed to pursuing this issue in the WTO in order to take forward the mandate given in the Bali (2013) and Nairobi (2015) ministerial conferences of the WTO.
It needs to be put in proper perspective to get a perspicuous picture of what is going on in the farm front negotiations in the WTO. The polemical rules finalised in agriculture (first time agriculture agreement was brought under the WTO umbrella) during the previous Uruguay Round (1986-93) parleys ensured that the United States, the European Union and other rich countries continue with their entitlements to provide trade-distorting domestic subsidies as well as other programmes till date sans any material change. Per contra, the developing (emerging) and the poorest countries, including India, are liable to a litany of restrictive limits which they cannot cross even if their population surges and prices soar in the international grain markets. One need to reckon, for instance, the calculation of the aggregate measurement of support (AMS) – under which India is allowed to expend up to 10 per cent of its value of production in the so-called de minimis programme – that is done on the basis of prices existing during the 1986-88 base period. Despite the huge price inflation during the last three decades, countries like India must perforce ensure that their subsidy programmes based on 1986-88 prices do not exceed the 10 per cent limit. This needs to be contrasted with a report titled Agricultural Policies in OECD Countries, 2010 by the Paris-based intergovernmental think tank of 34 rich industrial countries, the Organization for Economic Cooperation and Development (OECD). According to this, in 2009, farm support to producers in OECD bloc was estimated at $253 billion (euro 182 billion), as measured by the Producer Support Estimate (PSE). This is equivalent to 22 per cent of aggregate gross farm receipts, slightly up from 21 per cent and back to the 2007 level.

The sweet irony is that the rich world has no qualms in doling out huge amount of subsidies year after year to its farmers which result in glut in the global grain markets and bring down the fair price of exports of poor countries’ farmers for their produce. It was only in the Nairobi Ministerial in 2015 that the WTO members agreed to abolish agricultural export subsidies and set disciplines on export measures with equivalent effect, levelling the playing field for farmers around the world. The EU presented a change of commitments incorporating the implementation of the landmark 2015 decision on October 17 in Geneva, just before the meeting of the WTO’s Committee on Agriculture! In fact, at the Marrakesh meeting, Union commerce and industry minister Suresh Prabhu made it categorically clear that the India-China proposal for eliminating the most trade-distorting domestic support or the aggregate measurement of support in the advanced countries such as the US, the EU, Norway, Canada and Switzerland, inter alia, remains the basis for negotiations to reduce global farm subsidies. The proposal was endorsed by trade ministers from many members of the G-33 farm coalition led by Indonesia, Africa and the ACP (Africa, Caribbean and the Pacific) countries at the meeting.
Interestingly, in the Committee on Agriculture, five WTO members – Australia, Canada, the EU, Thailand and the United States – posed 26 queries to India concerning its latest domestic support notification and domestic support policies in general. Most of the questions ranged from transparency issues, public stockholding for food security purposes, input subsidies for low-income or resourcepoor farmers and market price support. New Delhi was quizzed on why its domestic support notification did not include the annual value of production for products where India claimed support was below de minimis levels. On public stockholding, India said before the onset of the marketing season, the government consults agencies concerned to make an assessment of availability of foodgrains for procurement which must be based on various factors; farmers in India are primarily lowincome farmers and only a portion of marketable surplus offered by them conforming to prescribed specifications is procured under market price support operations, the government responded to queries from WTO agitated members.

The eU presenTed a change of commiTmenTs incorporaTing The implemenTaTion of The landmark 2015 decision in ocTober This year

On input subsidies, New Delhi said all support is provided in line with Article 6.2 of the Agreement on Agriculture (AoA) granting special flexibilities to developing countries for such support. India said it would need more time to respond to some of the queries raised. In the end, the trading partners are eagle-eyed enough to seek clarifications on New Delhi’s farm support policies to ascertain whether they are WTO-compatible or contemptible!
Be that as it may, pressure is mounting on New Delhi to reduce or end its subsidised public stockholding programme or to sustain it with some quid pro quo agreement not to make too much of a fuss over the overwhelming farm subsidies being doled out by the rich world. How far the savvy accountant-turnedminister Suresh Prabhu could succeed in safeguarding India’s farm interest would be known at the forthcoming 11th ministerial of the WTO. In fact, going by the last WTO ministerial experience at Nairobi, India came empty-handed sans securing any credible result on the pledges it had made ahead of the conference. If anything, it undertook commitments on export subsidies that badly bruised its ability to accord subsidies to its cotton farmers. One can at best wistfully wish that such a bad bargain would not get repeated this time around to the lasting mortification of legions of our worry-laden farmers.