Discussions on food security at WTO
Source: WEF

From December 15th-19th, Kenya hosted the 10th WTO Ministerial Conference. The conference in Nairobi focused on eliminating export subsidies in agriculture, as well as establishing rules to enhance the transparency of anti-dumping measures. In the build-up to the negotiations, the Indian Government, representing the G33, asked that, in return for its supposed for the elimination of export subsidies, other members, particularly developed countries, endorse a food stockpile program that entitles poor countries to public stockholdings of food grains and safeguards to protect poor countries from sudden import surges.

During the Bali conference two years ago, India pushed through an amendment (a “peace clause”) that committed members to finding a permanent solution to the issue public stockholdings for food security. In the interim, developing countries would not be challenged legally even if a country’s agreed-upon limits for trade-distorting domestic support were breached. This amendment was planned as an interim solution for a period of four years. India is keen to find a permanent solution because in its current form, the amendment does not allow the country to expand its food security program to new areas. This is especially pressing as India’s public distribution system (PDS) has been expanded in scope after the passing of the National Food Security Act to cover up to 67 percent of the population and would therefore need massive stocking of food grains to run the system. India’s Commerce Minister Nirmala Sitharaman, indicated prior to the conference that India would continue with the PDS reform while keeping the food security target in mind, maintaining that it is a sovereign right, regardless of WTO agreements.

India also proposed a special safeguard mechanism (SSM) that will allow developing countries to raise tariffs temporarily to deal with import surges or price decreases in certain commodities. India argued that due to the constant drive to bring down tariffs and the significant subsidies the developed countries provide for their farmers, this mechanism is the main option for ensuring the protection of domestic production in developing countries.

Both of these issues – public stockholding and the special safeguard mechanism – were addressed by separate decisions at last week’s meeting. The Ministerial Decision on Public Stockholding for Food Security Purposes (WT/MIN(15)/W/46) reaffirms the agreement reached at the 9th Ministerial Conference at Bali to allow developing countries to continue their food stockpiling programs until a permanent solution is found at the 11th Ministerial Conference in 2017. The decision also  commits the WTO’s Agriculture Committee to dedicated negotiations to ensure that the issue of permanent stockholding is resolved at the next Ministerial.[1]  

The decision regarding the issue of a special safeguard mechanism for developing countries recognizes that developing countries will have the right to temporarily increase duties when import prices fall or when they experience a surge in imports, once this mechanism is approved by WTO members. The special safeguard mechanism, or SSM, as it is currently being discussed, would rely on either price triggers or import quantity triggers; however, there is some controversy regarding whether such a safeguard would, in fact, protect poor populations. This latter trigger has proven controversial, however, with some experts questioning whether a volume-based safeguard would, in fact, protect poor populations.

In a wider context, India stressed the need for WTO member countries to take up discussions on the issue of trade-distorting farm subsidies in developed countries and their consequent adverse impact on millions of resource-poor and subsistence farmers in developing countries. Prior to the WTO meeting, Commerce Minister Sitharaman pointed out that the farm lobbies in developed countries have been shaping the discourse and impacting the livelihoods of millions of poor farmers in developing countries for decades. This is especially pressing as the current status quo impacts two-thirds of the global population, which comprises an overwhelming majority of poor and subsistence farmers.

India has criticized developed countries for their lack of commitment to finding a permanent solution to food security issues. Additionally, multiple developing countries have highlighted that developed countries are not focused on resolving the food security issues and instead are focused on putting an end to the Doha Round and getting new issues on the table, something that India has opposed. These disagreements again came into play in Kenya, preventing a compromise on the Doha Development Agenda.

India’s position received broad-based support from developing countries at last week’s meeting. In his opening address, President Kenyatta emphasized the importance of reaching an agreement on food security and the protection of the livelihoods of poor farmers. While the elimination of export subsidies and several of the other agreements reached do address some of developing country concerns, the failure to conclude the Doha Round and to reach a permanent solution on the issue of public stockholding remains a stumbling block.

[1] For further analysis of the issue of public stockholding for food security purposes, see: Díaz-Bonilla, E. (2015.) Lost in Translation The Fractured Conversation about Trade and Food Security. IFPRI Discussion Paper. http://ebrary.ifpri.org/cdm/ref/collection/p15738coll2/id/129861; Glauber, J. W. (2015). Agricultural Insurance and the World Trade Organization. IFPRI Discussion Paper. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2688091; Díaz-Bonilla, E. (2014.) On Food Security Stocks, Peace Clauses, and Permanent Solutions After Bali. IFPRI Discussion Paper.

http://www.ifpri.org/sites/default/files/publications/ifpridp01388.pdf; and Díaz-Bonilla, E. and David Laborde. (2015.) The Bali Agreement. An Assessment from the Perspective of Developing Countries. IFPRI Discussion Paper. http://ebrary.ifpri.org/cdm/ref/collection/p15738coll2/id/129221.

By:  Bas Paris, IFPRI

Photo credit:WEF