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EU, US request for food security data sparks trade row with India

Post a commentBy RJ Whitehead , 16-Jun-2014

The US and EU have called on the World Trade Organisation to make the provision of full information on India’s food subsidy programme a precondition before they can begin negotiations on how to tackle the issue of legitimising food procurement subsidies.

The request, however, has not been popular with either New Delhi nor other members of the G-33 group of developing countries, who say such a condition was not agreed at last December’s ministerial meeting in Bali.

At that event, WTO members had agreed on a pact to streamline the movement of goods across borders by upgrading infrastructure and cutting down transaction times. 

The US and EU had at the time promised to allow India to allocate food procurement subsidies without sanctions as a short-term measure. India, in turn, had promised to work on a long-term solution to the problem over the course of this year.

The Western trade powers have asked India to explain the means with which it can establish that the recipients of its food support are poor farmers.

Speaking to Business Line, an unnamed Indian commerce ministry official said: “These are all diversionary tactics used by developed countries, especially the US, to delay progress in a key area of concern for developing countries.

The US, EU and several other countries, including Australia, Brazil, Canada and Pakistan have also raised concerns about India’s wheat programme.

With around 800m Indians below the poverty line, India views a higher level of farm subsidies—fixed at 10%—as essential as the country could surpass a lower limit once its food security programme is implemented.

India’s position on the matter is still hanging, and the country risks action by any member of the WTO that is not satisfied by the data they have received from the country on prices, subsidies and the procurement of agricultural items.

Last week, Rajeev Kher, India’s commerce secretary, said that India was unhappy that some countries were not allowing talks on food security to begin even though WTO members had made progress on easing agricultural trade.

New Delhi has demanded that work on all issues agreed to in Bali, including the package of incentives for least developed countries, move at the same pace.

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