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04.08.2014 |

WTO trade deal fails over India’s food subsidy concerns

India
India's farmers: more important than trade (Photo: Bioversity International/Padulosi)

The World Trade Organisation (WTO) failed to reach a global trade deal after India’s refusal to ratify the agreement unless it included concessions allowing the country to subsidise and stockpile food. Consensus on the global reform of customs procedures had already been reached in Bali in December, but the deadline to sign the pact lapsed on Thursday at midnight after WTO members failed to reach agreement over India’s food subsidy concerns. Under its public food security programme India procures rice and wheat from farmers at above-market prices and provides subsidised food grains to the poor population. With current WTO norms, food subsidies are limited to 10% of the value of total agricultural production. However, the support is calculated at prices that refer to the base year 1986-1988 and do not take into account inflation and currency fluctuation. The Bali meeting came up with a “peace clause”: WTO members would not file complaints against India's food subsidies until a permanent solution was found by 2017. India declined last week not to sign the Trade Facilitation Agreement without a permanent solution to the food security issues. US Secretary of State John Kerry had pressed Indian officials to ratify the deal during a visit to New Delhi last week. Indian Prime Minister Narendra Modi said he was more concerned about the small Indian farmer: "The first responsibility of my government is to the poorest people of the country. While we don't oppose the agreement, we believe that the needs of those living on the margins of society, not just in India but elsewhere too, have to be addressed”, he told Kerry. The deal would have been the first global trade reform in two decades. Indian officials said they were willing to return to the table for new talks.

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