Sovereignty v/s Surrender : Food Security Act at stake , Hunger cannot be negotiated...

For a developing country like India , where millions of people are loosing their life, becoming victims of malnutrition , stunting, and prone to other life threatening diseases due to lack of 'food' , can there be anything more imperative than ensuring access to food to all citizens in general and the poor in particular.

We ( Our Parliament ) did this humane act , making access to food a legal right under the Food Security Act 2013 but now , due to our prior commitments on International platform ( WTO in this case ) , the implementation of this Food Act seems a distant reality.  

Under the Agreement On Agriculture signed in 1988, the member countries ( developing ) are bound to restrict their domestic support also known as “Aggregate Measurement of Support ” (AMS is the difference between the Procurement price and a “fixed, external reference price” for a product, say rice, multiplied by its total domestic production )  for agricultural products below 10 % of the current value of production. Price support to farmers are considered trade and production distortionary and comes under the category of Amber Box subsidies i.e. to be reduced and as India attempts to implement the Food Security  , there is little doubt that India will breach this ceiling of 10 % and thereby , violating its commitments under the WTO Agreement on Agriculture (AoA).

WTO : Bali Round 2013

 At Ninth WTO Ministerial scheduled for next month in Bali , a continuation of Doha Round 2001 ,  for negotiations to facilitate the increase of global trade ,  India is sure to face resistance  from the developed countries on its Food Security Act. The developed country’s argument is that if the state agencies start buying from farmers at well above international prices on a large scale, then it acts as an implicit incentive to the local farmer to produce more and that would squeeze out global grain suppliers leading to trade distortion.

India’s way out

India will have to primarily convince the members based on the following aspects :

·   * The proposal, as mooted by G33 ,  to categorise higher-than-normal procurement prices — for the purpose of ensuring food security — as a permitted agri-subsidy.

·   * As the AMS rule is unfair because the “external reference price” is pegged to 1986-88 levels ( Wheat price Rs 354 per quintal )  , there should be a more recent base price to arrive at cap levels.

·  * India may invoke clause 18.4 of AoA which says “ due allowance shall be given ‘‘ to the inflation factor while assessing whether the MSP violates the AoA. And the actual inflation should be considered.

Peace Clause : A trap and surrender of Indian sovereignty

The developed country’s offer to accept the Article 13 of AoA is not a solution for a country like India where Food is still the most desirable object .  It will impact India in two major ways: 

·  * Agreeing to peace clause will be an acceptance of the notion of Food Security Act as market distortionary.

· * It will also be a surrender of India’ s sovereignty as the Act is enacted by the Supreme Parliament with a vision to annihilate hunger from the country.

· *  After the peace clause gets over , it would be possible for member countries to use WTO dispute settlement mechanism to challenge Indian subsidies , if not withdrawn by India after four years.

We strongly believe that Indian diplomacy will overcome this impediment , leading the developing countries , and ensure that the legal right given to its citizen will not be compromised.


By - Shobhit Anand