WTO Needs to Look at Issue of Farm Subsidy with Open Mind: FM Sitharaman

GG News Bureau

Incheon, 3rd May. The World Trade Organization (WTO) should approach the issue of farm subsidies with an open mind as it affects emerging economies’ food security demands in the context of the Covid pandemic and the Russia-Ukraine war, said Finance Minister Nirmala Sitharaman on Wednesday.

Sitharaman stated at the Asian Development Bank (ADB) Governor’s conference on ‘Policies to Support Asia’s Rebound’ that the sooner the WTO finds a solution, the better for the globe.

“Since the WTO was founded, there has been a grievance with respect to the export of agricultural products and generally in trade, the voice of the Global South and emerging markets has not been heard at par with that of the developed countries,” she said.

The ‘Global South’ largely refers to Asia, Africa, and South America.

Subsidies for agricultural and impoverished farmers in developing nations were not counted and were blocked, she said, adding that food and fertilizer security has become vital in the context of Covid and the Russia-Ukraine war.

“We will all have to talk again (about food and fertiliser security) at the WTO with an open mind,” the minister said.

“There is better food security in the developed world compared to developing countries. Trade agreements have come about in a lopsided way, for which solutions have to be found,” Sitharaman said.

Under global trade norms, a WTO member country’s food subsidy bill should not breach the limit of 10 percent of the value of production based on the reference price of 1986-88.

As part of a permanent solution, India has asked for measures like amendments in the formula to calculate the food subsidy cap and inclusion of programmes implemented after 2013 under the ambit of ‘Peace Clause’.

As an interim measure, the WTO members at the Bali ministerial meeting in December 2013 had agreed to put in place a mechanism popularly called ‘Peace Clause’ and committed to negotiating an agreement for a permanent solution.

Under the Peace Clause, WTO members agreed to refrain from challenging any breach in the prescribed ceiling by a developing nation at the dispute settlement forum of the WTO.

This clause will stay till a permanent solution is found to the food stockpiling issue.