India, China find common ground on food security agreement

India and China will take a unified stance on food security agreement at the World Trade Organisation (WTO), an issue which is critical for both the nations.

Prime Minister Narendra Modi's three-day China visit is expected to see a cooperation pact on WTO issues.

India and China’s joint stand would put weight to developing nations’ agenda at the multi-lateral level, generally dominated by rich nations.

India had blocked the adoption of the trade facilitation pact in July last year in the face of heavy criticism. The country wanted a deal on finding a permanent solution to public stockpiling simultaneously with the adoption of the trade facilitation agreement.

However, at that time, India didn't get the backing of China or any of the other G-33 nations, including Indonesia.
But, India got its way in November and bagged exemption from WTO action for its agriculture subsidies until a permanent solution on the matter was found.

Economic Times reported that the developing nations were supporting the draft text of 2008, which allows programmes supporting low-income or resource-poor farmers without being penalised. But, the developed nations want it debated afresh, which could make a deal unlikely by the July deadline.

As per the financial daily, the current WTO norms limit subsidies at 10% of the total value of production of that particular crop, but the support is calculated at 1986-88 prices.

The G-33, a grouping of 46 developing nations, seeks a revision of the base to a more recent year or the accommodation of high inflation since that period. Global food prices have gone up manifold during this period with India having experienced inflation of about 650% overall.

The draft text being negotiated in Geneva also proposes a reduction of more than 50% in farm tariffs for developed countries to be implemented over five years and about a one-third reduction in tariffs for developing countries over 10 years.

China, too, has a public procurement programme and sets Minimum Procurement Prices (MPP) for wheat and rice through the central committee of the Communist Party of China and the state council to safeguard farm livelihoods by increasing incomes and ensuring national food security.

When market prices are lower than the MPP, the government buys wheat and rice from farmers to minimise their losses.

India’s Commerce and Industry Minister Nirmala Sitharaman had told Parliament last month that such a plurilateral approach would endanger the conclusion of the Doha trade round by disturbing the delicate balance arrived at on agriculture, non-agriculture market access and services after years of intense negotiations.

(Image: Reuters)