According to Finance Minister Nirmala Sitharaman, the World Trade Organization (WTO) should consider the issue of farm subsidies with an impartial approach. This is essential as it has a significant impact on the food security requirements of developing economies in the current context of the Covid pandemic and the ongoing conflict between Russia and Ukraine.
"There has been an issue with respect to agricultural product exports since the WTO was founded, and generally in trade, the voice of the Global South and emerging markets is not considered at par with that of the developed countries," she said. The 'Global South' mostly refers to Asia, Africa, and South America.
Subsidies for agricultural and impoverished farmers in developing nations were not counted and were blocked, she added, adding that food and fertilizer security has become vital in the context of Covid and the Russia-Ukraine crisis.
"We will all have a discussion again (about food and fertilizer security) at the WTO with an open mind," the minister said. The developed world has better food security than developing countries." Trade accords have been uneven, and alternatives must be found," Sitharaman explained.
According to global trade regulations, a WTO member country's food subsidy bill should not exceed 10% of the value of output based on the 1986-88 reference price.
As part of the solution, India has requested for measures like modifications in the methodology to compute the food subsidy cap and inclusion of schemes implemented after 2013 under the ambit of ‘Peace Clause’.
WTO members decided to implement a mechanism known as the 'Peace Clause' as an interim measure at the Bali ministerial meeting in December 2013, and promised to seek a permanent solution.
Under the Peace Clause, WTO members agreed not to challenge any violation of a predetermined ceiling by a developing country before the WTO's dispute settlement forum. This clause will remain in effect until a permanent solution to the food stockpiling problem is discovered.
