India may not secure food security deal at WTO Nairobi meet

farmers

US, EU, Australia, Brazil, Paraguay, and Pakistan effectively rejected a draft decision aimed at exempting programmes for supporting millions of resource-poor farmers from any subsidy limit.

India is unlikely to secure a permanent solution for public stockholding programmes for food security at the World Trade Organization’s Nairobi ministerial next month, after the US, the European Union (EU), Australia, Brazil, Paraguay, and Pakistan effectively rejected a draft decision aimed at exempting programmes for supporting millions of resource-poor farmers from any subsidy limits.

On Wednesday, the US, the EU, Australia, Brazil, Paraguay and Pakistan said the draft ministerial decision for a permanent solution being tabled by India along with its allies in the G-33 farm coalition would distort global farm trade because of exemptions for such programmes from subsidy discipline.

The G-33 farm coalition led by Indonesia, in which China, India, the Philippines, Korea, Turkey, Kenya and 40 other countries are members, has demanded two deliverables at the Nairobi ministerial beginning on December 15—a special safeguard mechanism (SSM) for protecting poor farmers from sudden surges in imports of farm products supplied by heavily-subsidized countries and exemption from subsidy reduction commitments for public stockholding programmes.

The US, the EU, Australia, and Brazil blocked the G-33’s SSM proposal on Tuesday. But, on the permanent solution for public stockholding programmes, the US, the EU, Australia, Brazil, Paraguay and Pakistan adopted a different strategy

On Wednesday, the chair for Doha agriculture negotiations Vangelis Vitalis convened a closed-door meeting to discuss the G-33 draft ministerial decision on the permanent solution. Participants invited to the meeting included the US, the EU, Australia, Brazil, Paraguay, Indonesia, China, India, the Philippines and Nigeria.
Indonesia explained the central features of the four-page draft decision, which calls for amending the WTO’s agreement on agriculture by inserting a new annex six to cover the domestic subsidies underpinning the public stockholding for food security purposes.

The decision says programmes for the acquisition of foodstuff at administered prices by developing and poorest countries “with the objective of supporting low-income or resource-poor producers,” and for subsequent distribution at subsidized prices with the objective of meeting food security requirements shall be exempted from subsidy reduction commitments.

Some countries, said India, spoke about “unintended consequences” but have not given any suggestions on how they can be addressed, according to participants familiar with the meeting.

India asked the opponents whether they are rejecting the G-33 proposal for a permanent solution on the ground that the interim solution is adequate and doesn’t require a change, said a participant, who asked not to be quoted.

In response, the EU said: “We are not rejecting the G-33 proposal but in the current form it cannot be accepted,” the person said.

Australia expressed serious doubts about the draft decision and whether it would properly address the “unintended consequences” such as the leakages from public stocks into the international market. The G-33 proposal, Australia said, will create another “green box”, implying another major exemption for programmes that do not have to be accounted for in subsidy reduction commitments.

The EU maintained that it wants to engage constructively in finding a permament solution. But the real deadline for finding the permanent solution is the eleventh ministerial conference in end-2017, and not the Nairobi ministerial, the EU argued.

At the Bali ministerial, trade ministers set a deadline for finding the permanent solution by end-2017, at the eleventh ministerial meeting while members at the General Council had mandated concerted efforts to resolve this issues by 31 December.

The EU suggested that the General Council’s decision last year is less important than what ministers had decided at the Bali ministerial meeting in 2013. Further, the best option for the G-33 countries is to start implementing the interim solution as worked out at the Bali ministerial in December, 2013, instead of pressing for a permanent solution, the EU maintained.

The US said it remains committed to public stockholding discussion but the latest G-33 proposal doesn’t change the substance of retaining such programmes in the green box, according to participants familiar with the meeting.

More pointedly, the US said that “amending the AoA [agreement on agriculture] is not the right way.”
Pakistan supported the EU by saying that the Bali decision struck the right balance and that the public stockholding programmes will lead to unsustainable production as well as undermine reform of global farm trade.

Brazil said it is seriously concerned about the “unintended consequences” which the proponents have not addressed in the draft decision. Paraguay said the G-33 proposal calls for a huge carve out by exempting food security programmes from subsidy discipline.

China asked the opponents to engage constructively by suggesting what needs to be done if there is a problem of placing the public distribution programmes in the green box disciplines which are exempted from reduction commitments.

India dismissed the concerns raised by Australia, the EU, Australia and Brazil saying that those talking about farm trade reforms are silent about the huge subsidies provided by a few major industrialized countries. India challenged the EU’s interpretation of last year’s general council decision to arrive at a permanent solution by the tenth ministerial meeting. It said the General Council decision last year during the inter-ministerial conferences is hierarchically on the same footing as decisions taken by trade ministers.