WTO: Cabinet to take strong stand on food security

Food SecurityThe current Agreement restricts the 'market distorting subsidies' to just 10 per cent of the total production.

The Cabinet Committee on World Trade Organization on Monday will deliberate on the stand India should take in the upcoming Ninth WTO Ministerial Talks in Bali next month.

Ahead of the talks, India is of the view that a watering down of the "peace clause" could help it provide higher subsidy payouts to farmers.

"The duration of the peace clause should not be seen as the main issue. Lifting of the subsidy cap could be more useful to a country like ours, which provides minimum support price to more than two dozen crops," said a senior government official.

A shorter duration in the peace clause could also help reach a final solution and take forward the stalled Doha round of global trade talks.

The peace clause offers a respite for four years from attracting penalties when the agricultural subsidies cross 10 per cent of total production. When the recently-passed food security bill, which entitles around 67 per cent of the population to 5 kg of subsidised foodgrains, is fully implemented, the subsidies are likely to breach the 10 per cent limit.

The current Agreement on Agriculture of the WTO restricts so-called "market distorting subsidies" to just 10 per cent of the total production.

However, G-33 countries including India and Indonesia are hoping for changes to the pact to remove restrictions on public stock holding and food subsidies.

This is especially crucial to India which has just enacted the Food Security Act, under which food subsidies would breach the 10 per cent limit. The peace clause would also help India implement the Food Security

Act without breaching the WTO subsidy levels. The clause, offered by WTO chief Roberto Azevedo as an interim solution, will provide developing countries a four year relief period from penalties on breaching the food subsidy cap.

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