India Calls Domestic Food Subsidy Margins in AoA Talks for Bali

Governments should explore “alternative approaches” to a developing country proposal for more flexible WTO rules on subsidised food stockholding, the chair of the organisation’s farm talks said this week.

New Zealand Ambassador John Adank told a meeting of around 30 senior officials on Tuesday, 30 April that the bid to amend current rules in this area was “not likely to be acceptable” to delegations in the run-up to the global trade body’s ministerial conference, set to be held in Bali, Indonesia this December.

US calls for a WTO work programme on trade and food security

A statement from US Ambassador Michael Punke called for WTO members to agree on a work programme on trade and food security “that can examine the full range of trade-related government measures that can contribute to that goal.”

Punke told other senior officials that “work can and should include examination not only of the role of public stockholding and administered prices in addressing food security concerns, but also how to improve food security through better-functioning markets, including further liberalisation in agricultural trade, reductions in trade-distorting support, elimination of export restrictions, improved transparency, and efficient distribution systems.”

Along with several other developed countries and a number of developing ones, the US has been vocal in expressing concern that the G-33 proposal could potentially allow developing countries to reverse progress towards reducing trade distortions in global agricultural markets.

India, along with some other large developing countries, has argued that developing countries should be allowed to purchase food at administered prices from resource-poor or low-income farmers, without having to count these purchases towards the WTO’s maximum-permitted ceiling on trade-distorting farm support.

G-33 members present new “non-paper”

Adank met again yesterday with a small informal group of around a dozen trade officials that he has convened repeatedly in recent weeks, sources said. Ambassadors have been attending these discussions, accompanied by a maximum of one technical official each.

The group includes developed countries with reservations about the G-33 proposal, such as the US, EU, and Australia, as well as developing country proponents, such as China, India, and Pakistan.

On 1 May meeting, the group circulated a “non-paper” for discussion, a copy of which has seen by Bridges. The document identified four elements that could be negotiated in order to provide developing countries with additional flexibility.

Trade facilitation link

Trade sources also told that India was linking progress on a trade facilitation deal- which would be the centrepiece of any Bali package - to further concessions on the G-33 proposal.

“The Indians were signalling their desire that the G-33 proposal be taken seriously, if they were to be more constructive in the trade facilitation discussions,” one negotiator said.

The parliament in New Delhi is set to review proposals that would dramatically expand subsidised food provision to eligible households, under India’s new Food Security Bill. These would extend food subsidies to up to 75 percent of the rural population, and up to 50 percent of the urban population.

In Geneva, India has warned that current rules on trade-distorting support could bring the country close to agreed limits on “de minimis” payments - set at ten percent of the country’s value of production. While food purchases at administered prices would normally be seen as trade-distorting “amber box” payments, New Delhi has argued that these should be relaxed for purchases from low-income or resource-poor farmers - considered by the government to be those producers with fewer than 10 hectares.

While developed countries have claimed that current WTO rules place no constraint on subsidising poor consumers, India and other G-33 countries have argued that a change in the global trade body’s rules is needed in order for countries to also support the livelihoods of poor producers.