India wants Permission to Attend US-China Row at WTO

India has asked for the permission to attend first of its kind proceedings at the World Trade Organisation targeting the market price support program for agriculture produced of a member country. The World Trade Centre recently agreed to the US’ request for a dispute panel against China’s price support programme for wheat, rice and cotton which has put India on a state of alert.

A government official recently said that New Delhi is keen to follow the negotiations as the future of its own minimum support prices (MSP) programs could be at stake in the future. There is a peace clause that gives India some protection against dispute but it still has some limitations. The establishment of WTO panel against China underlines why India has been so insistent that a permanent solution to its food security concerns should be reached at the earliest. India doesn’t want to reach a situation where our food support programmes are challenged.

India, and other developing countries with poor population to support, have been lobbying hard to ensure that the Agreement on Agriculture (AoA) of the WTO is suitably amended to remove limits on public stock holding and food aid. The AoA allows so called ‘market distorting subsidies’ up to a limit of 10 per cent of total production. With the rise in food prices and the number of poor to be supported in developing countries over the last two decades since the AoA was framed, these subsidies have gone up substantially. Once India fully implements its food security programme, there is a possibility that its procurement subsidies would breach the 10 per cent cap. The US, in its complaint, said it was concerned that China’s market price support for wheat, rice and corn each exceeds the permissible level of domestic support China agreed to upon accession to the WTO.

By BOA Bureau