US, EU ask India to detail its food subsidy programme at WTO

The US, the European Union and some other countries have asked India and China to submit full information on their food subsidy programmes to the World Trade Organisation, so that they can firm up their stance against food subsidies offered to the poor.

The US and the EU oppose India's food procurement and its subsidised distribution among its poor on the ground that the high procurement prices and low consumer prices undermine the market and import of foodgrains into the country.

They have also set detailing of India's food subsidy programme as a pre-condition to starting negotiations on legitimising India's food procurement system and subsidies under the public distribution system.

Member countries of the Group of 33 (G-33) and other developing and poor countries in the WTO have argued that no such conditions were laid down in the mandate of the Bali ministerial meeting last December for talks on agriculture.

At a recent meeting of the Committee on Agriculture at the WTO, India has also been asked to explain how it establishes that the recipients of its support programme are the poor farmers.

India and other developing countries see these as a diversionary tactics used by developed countries, especially the US, to delay progress in a key area of concern to developing countries.

The US, Australia, Brazil, the EU, Pakistan, Canada, Thailand, Costa Rica and Paraguay have also raised concerns about India's wheat programme as the country also exported the foodgrain.

At the last WTO ministerial meet, the developed countries had promised to allow India and some other developing countries to continue with the food procurement subsidies without attracting sanctions, as a short-term measure, before working out a long-term solution to the issue.

Last December in Bali, WTO members had agreed to streamline movement of goods across borders by upgrading infrastructure and cutting down transaction time (Trade Facilitation Agreement) being pushed by developed countries.

India, however, needs a higher level of farm subsidies, which is currently fixed at 10 per cent of agriculture production, as it could breach the limit once its sood security programme is fully implemented.

Commerce secretary Rajeev Kher, meanwhile, had said that while much progress had happened on implementation of the trade facilitation agreement, some countries were not allowing talks on food security to begin.
Without a permanent solution to the problem, India faces the risk of action by any member country, which is not satisfied with the information on prices, subsidies and procurement of agricultural items submitted by the country.