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In their first summit, Prime Minister Narendra Modi and President Barack Obama on 30 September in Washington pledged to push the bilateral relationship to "new levels", resolve issues blocking implementation of the civil nuclear deal and cooperate in counter terrorism. During their hour-long discussions, which covered a broad range of issues including economic cooperation, trade and investment, Modi raised the demand for easier access to Indian services in the US. After the two countries reached an agreement on extending their defence cooperation for ten more years, the Prime Minister invited American companies to participate in Indian defence manufacturing sector.
Both of them had a candid discussion about World Trade Organisation (WTO) issues. "India supports trade facilitation but it is my wish that a solution should take care of our food security concerns. I am sure that it is possible to do that early, and I am looking forward to building up on relationship and make more progress," Prime Minister Narendra Modi said in a joint statement. In a strong message, Modi said it would not ratify the trade facilitation pact until a permanent solution is found on food security impacting livelihood of millions of Indian farmers.
Since the Bali ministerial meeting last December, WTO members have repeatedly put the lens on India's farm sector policies, especially those related to exports and the scrutiny has only gone up since the Indian government blocked a deal on trade facilitation agreement (TFA) this July, arguing that it will not back it till concerns over domestic support for public stockholding are sorted out.
In a document released by WTO on 1 October, Australia and Brazil's attempts to get some answers to their concerns over the export subsidy for sugar once again come through. In a detailed questionnaire, they not only asked about the support that is provided, but Australia has reiterated that the subsidy is not compatible with WTO rules.
Similarly, the US and Canada have expressed concern over India exporting subsidized wheat and the Americans have even given a detailed cost analysis, which includes calculations from Comptroller & Auditor General's (CAG) report. The government has, however, parried the questions and did not disclose the data, arguing that the tender process was underway.
In fact, several countries have blocked India's attempts to push through the plan to allow limitless minimum support price (MSP), arguing that it will help it export subsidized grains into the world market, and distort the price. The government has been exporting excess stock of wheat to reduce the burden on overflowing silos, raising fears that subsidized grains are being sold in the international markets.
Pakistan - which was part of the coalition that was pushing the food subsidy proposal at the WTO but walked out at the last minute - has also alleged that India is following a "double subsidization" process, which means that subsidized inputs such as power and fertilizer are given to farmers along with MSP to offer an assurance to buy the rice and wheat. While India countered it by saying that the policies were in line with the WTO agreement on agriculture, the US and Pakistan have sought detailed data, arguing that India is the largest rice exporter in the world.
For the US, even the farm holdings and land laws in India are a big area of concern as data released by India has showed that between 2000-01 and 2010-11, there was a spurt in the proportion of land with marginal and small farmers, while the population of those with large farms went down. India has responded by saying that this is due to an increase in the holdings or population with existing hereditary laws.
With India taking a strong stand, it will now be difficult for the developed nations to push their agenda of implementing the TFA. With this deadlock, the WTO has missed another deadline July 31 to implement a pact.
"In order to fully understand and address the concerns of members on TFA, my delegation is of the view that the adoption of the TF protocol be postponed till a permanent solution on public stock holding for food security is found," the Indian Ambassador to the WTO Anjali Prasad said.
Regretting that in the last seven months no progress has been made on the public stock-holding for food security purposes, India said: "We do not have the required confidence and trust that there will be constructive engagement on issues that impact the livelihood of a very significant part of the global population."
Amendment to WTO norms regarding stockpile of foodgrains is critical for India for implementation of its food security programme. The current WTO norms limit the value of food subsidies at 10 per cent of the total value of food grain production. However, the support is calculated at the prices that are over two-decade old and not at current prices. India is asking for a change in the base year (1986) for calculating the food subsidies. The US gives about $120 billion as agriculture subsidy as compared to India's $12 billion.
The final protocol for the TFA, which is dear to the developed world, including the US and Australia, but no single meeting has happened on India's food security related issues.
The United Nations' Millennium Development Goals to eradicate extreme poverty and hunger stands on the foundation of the food security legislation. For most of the developing countries, including India, public stockholding for food security is a livelihood issue. The TFA is based on the agenda of maximum reduction in trade barriers and red-tapism to promote global trade. India should definitely be a signatory to TFA, has to safeguard its interest.
