Concern over procurement and distribution of subsidised foodgrains

Asserting that India would soon be breaching its Aggregate Measurement of Support (AMS) commitments to WTO (World Trade Organization) due to its new food security programme, the newly-elected Director-General, Roberto Azevedo, on Monday, sought a positive solution to the issue before the Bali Ministerial to be held in December as some countries had expressed concern over the procurement and distribution of highly subsidised foodgrains.

Speaking separately at events organised by Confederation of Indian Industry (CII) and Federation of Indian Chambers of Commerce and Industry (FICCI), Mr. Azevedo said India had asked the WTO to work out a solution as it was keen to win legitimacy for its ambitious food security law that promised highly subsidised foodgrains to rural and urban poor. “We have agreed in Geneva on a certain issue, and are working on a ‘peace clause’ to find a permanent solution to the issue. India will soon be breaching its AMS commitments in the WTO. So, they are asking for some kind of action in Geneva that could allow those programme to continue to work unaffected till a final solution is found,’’ the WTO Director General said.

He said the Bali Ministerial meet would look at how this permanent solution would come. The Peace Clause in Article 13 of the agreement on agriculture (AOA) has been there for nine years. India is open to accepting a Peace Clause as an interim mechanism till an acceptable final solution is arrived at. India is also ready to commit that procured foodgrains would not be released for international trade and the management of public stocks would be done in a transparent manner, the official said.

The UPA II government is at present implementing the Food Security Act which entitles 82 crore people to 5 kg of foodgrains per person in a month at the rate of Rs.1-3 a kg. The country needs 62 million tonnes of foodgrains in a year to implement the law. “The initial proposal on food security, which was tabled by G-33, was immediately rejected by many countries for different reasons. However, we have made lot of progress since that point of time. From upfront rejection, we now are building environment for very constructive engagement that will try to address this issue in a positive manner,’’ Mr. Azevedo said.

Mr. Azevedo underlined the need for national governments to show flexibility to evolve a consensus on a multilateral trade package that was meaningful and doable.

“Time is running out, and it is imperative that Trade Ministers actively engage with one another in the weeks ahead to find a common ground, failing which plurilateral, multilateral and bilateral agreements will proliferate and many countries will be denied the benefits of a rule-based approach to trade liberalisation. The markets will then open on non-MFN basis, and the ticket to admission into these agreements will be far more expensive than a WTO-led multilateral trading system,’’ he added.

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