Developing countries fight for food stock at WTO meeting

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Trade and commerce ministers from developing nations will aggressively negotiate agricultural stockholding during the Eleventh World Trade Organization (WTO) Ministerial Conference in Buenos Aires from Dec. 10-13.

India, China, and Indonesia, as a part of the G33 coalition, are seeking a complete exemption to curtail public stockholding, including subsidies, minimum support prices and poverty alleviation initiatives.

The policy of public stockholding of agricultural produce attempts to promote food security by purchasing and distributing food grains at a fixed minimum-support price decided by the government.

Under the program, states buy grains from farmers either to boost food security or prevent farmers from exploitation. In some countries like India, it's also done for poverty alleviation.

Earlier, WTO had sought to phase out the practice of stockholding.

The trade ministers from G33 nations vehemently opposed the phasing out of this policy. An agreement in the form of an interim “peace clause" was agreed to during the WTO’s 2013 Bali Ministerial Conference (MC) to resolve the issue.

The clause allowed developing countries to provide subsidies under public stockholding programs without being legally challenged in the WTO's dispute settlement system.

The peace clause was also discussed at 2015 Nairobi Ministerial Conference. According to WTO, it was confirmed that countries would make every effort to agree and adopt a permanent solution on stockholding by 2017 and that the interim solution would remain in force until a permanent solution is approved.

A watchman sits next to stacked sacks of rotten wheat crop at Dera Mir Miran village in Punjab June 27, 2012. /Reuters

During the MC 11 held from Dec. 10 to 13, the issue would be discussed at length whether to extend the deadline or eliminate it.

On Sunday, a day before the formal WTO talks began, India’s commerce and industry minister Suresh Prabhu after a meeting with European Trade Commissioner, Cecilia Malmstrom told the Times of India, "For us, the priority is to have a permanent solution on public stockholding which is better than the peace clause."

Prabhu also met with delegates from major developing Asian and African countries.

While developing countries are fighting for food security, the US along with EU is demanding a time-specific action to end stockholding.

The developed nations argue that India alone invested a whopping 19 billion US dollars in 2014-15 to purchase food grains from farmers. The country’s food problem is an outcome of the inadequate storage facilities, where grains are gobbled up by rodents or rots in poorly maintained warehouses.

The group of developing nations is also raising voice against the reduction in massive trade-distorting farm subsidies offered by developed countries.

It's reported that India and China have submitted a joint paper to the WTO; both countries claim that the developed world, including the US and the EU, enjoyed 90 percent of the farm subsidy entitlements, amounting to 160 billion US dollars a year.

The MC 11 will also discuss e-commerce, fisheries, medium and small-sized enterprises, trade and development issues.

A vendor sleeps next to bags of onions as he waits for customers at a vegetable wholesale market in Taiyuan, Shanxi province on June 17, 2014. /Reuters‍

The majority of countries participating in WTO talks are pushing for a binding agreement to eliminate fisheries subsidies.

The fishing industry enjoys a subsidy of 35 billion US dollars every year, and nearly 20 billion US dollars is allocated for the capacity building of large fishing fleets in the form of fuel subsidies and tax reduction.

The massive subsidy, according to United Nations has led to around 60 percent of global fish stocks being fully exploited, and more than 30 percent are overexploited. The UN’s Sustainable Development Goals (SDGs) intends to abolish fishing subsidies by 2020.

“Since MC10 we have seen an extraordinary burst of creativity, with members discussing how we might find agreements in agriculture, less burdensome regulations for trade in services and disciplines on fisheries subsidies,” said Roberto Azevêdo, Director-General of WTO, in a press release.

But with the US doubting the work and purpose of the organization, it’s likely that developing countries will have limited scope for making headway during the negotiations related to agriculture and fisheries negotiations.

Chinese Commerce Minister Zhong Shan told Xinhua that China would promote the creation of a new configuration of integral opening-up, firmly support the multilateral trade regime and encourage the construction of an open global economy.

"China boosts least developed countries to join the WTO and asks for multi-directional help from all parties."