Sitharaman: WTO Must Approach Issue of Farm Subsidies with Open Mind

On Wednesday, Finance Minister Nirmala Sitharaman expressed that the World Trade Organization (WTO) should approach the issue of farm subsidies with an open mind, considering the impact it has on the food security requirements of developing nations during the ongoing COVID-19 pandemic and the Russia-Ukraine conflict.

During the ADB Governor's seminar on ‘Policies to Support Asia's Rebound,' Ms. Sitharaman expressed the view that it would be beneficial for the global community to find a resolution to current issues being faced by the WTO as soon as possible.

"There has been a longstanding complaint regarding the export of agricultural products, and in general, there has been a perceived imbalance in trade negotiations where the Global South and emerging markets feel that their voices have not been given equal weight to those of the developed countries within the World Trade Organization," she said.

She mentioned that subsidies intended for agriculture and impoverished farmers in developing nations were disregarded and halted. Additionally, she emphasized that due to the COVID pandemic and the ongoing conflict between Russia and Ukraine, ensuring food and fertilizer security had become a critical issue.

“We will all have to talk again [about food and fertilizer security] at the WTO with an open mind,” the Minister said.

Minister Sitharaman further added, "Food security is more robust in developed nations when compared to developing nations. The trade agreements have been skewed, and therefore, it is necessary to find solutions to address this issue."

According to global trade regulations, a country that is a member of the World Trade Organization (WTO) must ensure that its food subsidy expenditure does not exceed 10% of the value of its agricultural production, based on the reference price from 1986-88.

India has proposed some measures as a permanent solution, including changes to the formula used to calculate the food subsidy limit and the extension of the "Peace Clause" to cover programs that have been implemented after 2013.

The Peace Clause is an agreement among members of the World Trade Organization (WTO) to abstain from disputing any violation of the prescribed limit by a developing country at the WTO's dispute settlement forum. This clause will remain in effect until a long-term resolution is reached regarding the matter of food stockpiling.

-PTI

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