Criticizes India agreeing to WTO’s ‘peace clause’ conditionality to limit food subsidies to only four years

Rather than agreeing to the World Trade Organisation’s “peace clause” conditionality for limiting food subsidies to only four years against the provisions of the Parliament-enacted National Food Security Act, India should come out of the negotiations, former Union Secretary E.A.S. Sarma said on Wednesday.

Taking umbrage to the Congress-led UPA government “caving in” to pressure by developed countries in the WTO, Mr. Sarma accused the government of keeping Parliament in the dark and enacting the National Food Security Act only to gain political mileage.

Speaking to The Hindu, Mr. Sarma said he has written to UPA chairperson Sonia Gandhi and all Parliamentarians regarding the issue.

“My concern is that Parliament is supreme and if there is a conflict between a Parliament- enacted law and WTO conditions, then India should tell the WTO that it will have to opt out of it. It is unfortunate that the UPA government should negotiate a “peace clause” with the WTO limiting food subsidies to be applicable for four years even before the ink on the food security act has dried,” he said.

In his letter to Ms. Gandhi, Mr. Sarma said, “This decision inevitably leads one to the conclusion that the UPA has enacted the legislation only to gain political mileage and not with any commitment to the need to provide nutritious food to the low-income groups.”

“The government has tacitly accepted the contention that the food subsidy is a “market distorting subsidy.”

In other words, when Parliament has provided a permanent statutory foundation for food security as a fundamental right, the UPA executive has bowed down before WTO and introduced a time limitation, a concept not envisaged by Parliament,” Mr. Sarma said.

He added: “It is ironical that India should initially lead 46 developing countries in the WTO to press the argument that the concept of food security be outside WTO protocols on free trade but quietly cave in to pressures exerted to discard the argument overnight.”

India heads the G-33 group of 46 developing nations which is seeking amendments to the WTO Agreement on Agriculture to allow procurement of food grains from marginal and subsistence farmers. Grains procured to fight hunger should not be included under WTO-restricted subsidies, the group says.

The agreement allows “market distorting subsidies” to be restricted to 10 per cent of the total production.

India apprehends that its recently-enacted food subsidy law which provides for cheap food grains to nearly two-thirds of the population could push food subsidy beyond the 10 per cent.

Therefore, barely weeks ahead of the WTO’s ninth ministerial in Bali in December, it has accepted a four-year “peace clause” against the 8 to 9 years sought by G-33.

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