Info Service on WTO and Trade Issues (Nov13/07)
18 November 2013
Third World Network
farmers call for rejection of draft ‘peace clause' solution
Published in SUNS #7698 dated 18 November 2013
Geneva, 15 Nov (Kanaga Raja) -- Expressing alarm over the "take-it-or-leave-it"
draft text on an interim solution on the G-33 proposal on public stockholding
for food security, a number of farmers' groups in India have called
on their government to reject such a ‘peace clause'.
In a letter dated 14 November 2013 and addressed to Prime Minister
Dr Manmohan Singh, these groups instead demanded a "permanent
solution" to protect farmers' livelihoods and access to food.
They further demanded that India "stand up to the might of the
US/EU, and reject any proposal that leads to dismantling of the famine-avoidance
strategies", adding that India cannot be forced to go back to
the days of ‘ship-to-mouth' existence.
The groups urged India to pursue the G-33 proposal aggressively as
the way forward and "not accept the current proposal which effectively
neutralises the Peace Clause with its farcical conditionalities."
The letter was signed by some 15 farmers' associations and unions
including Bhartiya Kisan Union, National Fish Workers Forum, Haritha
Sena, Karnataka Rajya Ryotha Sangam, Thamizhaga Vivasayigal Sangam,
Kerala Coconut Farmers' Association, BJP Kisan Morcha, and Bharti
[According to the draft ‘due restraint' interim solution purportedly
put forward by Director-General Roberto Azevedo on Tuesday as a ‘take-it-or-leave-it'
proposal, the ‘peace clause' would have a duration of only fours years,
up until the 11th Ministerial Conference.
[Some trade observers have noted that the anti-circumvention/safeguards
provision in the draft text is rather vague in meaning, which simply
states: "Any developing Member seeking coverage of programs under
paragraph 1 shall ensure that stocks procured under such programs
do not distort trade."
[They further pointed out that the draft decision would be applicable
to a limited number of traditional staple food crops, and contains
some rather onerous notification and transparency obligations. Furthermore,
the ‘peace clause' would not apply to the Subsidies and Countervailing
Measures (SCM) Agreement. As a result, those developing countries
undertaking public procurement for stockholding as part of their food
security strategy, would be put in a position of having to prove that
they are not distorting trade.
[According to these trade observers, the only positive element of
this draft text appears to be the proposed work programme aimed at
finding a permanent solution, which is laid out in paragraph 7: "Members
agree to establish a work programme to be undertaken in the Committee
on Agriculture to pursue this issue within the context of the on-going
agricultural negotiations with the aim of making recommendations for
a permanent solution."
[However, the observers note, this has to be weighed against the fact
that some similar work programs, launched on other issues at other
earlier ministerials, remain still pending completion. Even the Marrakesh
Treaty-mandated work programme for harmonising the MFN rules of origin
(mandated to be completed by end-1997) remain incomplete, bottled
up at the General Council since 2007, with no decision.
[And if this happens to the ‘peace clause' on food security, and no
permanent solution emerges by the time of the 11th Ministerial Conference,
the ‘peace clause' would have expired, and most developing countries
would at that time remain even more exposed to the inequitable WTO
[According to trade observers, the ‘peace clause' would then turn
out to have been a ploy for the US to get a Bali package with a binding
Trade Facilitation accord. It may or may not result in the WTO regaining
credibility before the US as a negotiating forum, but would end up
with people in developing countries losing any trust in the WTO, or
their governments who agreed to such a ‘peace clause'.]
In their letter to the Indian Prime Minister, the farmers' groups
said that in the twist of international trade rules, it seems that
India may now have to disband the gains of the Green Revolution and
revert back to the days of ‘ship-to-mouth' existence.
It has come up against WTO rules on agricultural subsidies, which,
according to the Agreement on Agriculture (AoA), allows only a ‘de
minimis' subsidy of 10% of production for most developing countries.
"This subsidy is irrationally calculated on the basis of a fixed
reference price of 1986-88 when prices were much lower. This inflates
the subsidy and it remains disconnected from the reality of global
agricultural prices today. In addition, the whole production eligible
to receive such subsidy and not the actual production which is being
procured is included in the calculation," said the letter.
The groups believe that in response to this challenge posed by current
WTO rules, permanent changes are required in AoA rules to allow such
subsidies to be treated as non-trade distorting.
Noting that this has been proposed by the G-33, the letter said that
it seems, however, that the developed countries, most notably the
US and the EU, have resisted such a proposal and outright rejected
most of the specific elements.
"Such resistance is unfair and shocking especially because the
US and the EU are openly continuing not only their domestic subsidies
but their export subsidies as well. They have not complied with the
20 per cent reduction of AMS [Aggregate Measurement of Support], and
they have shifted subsidies to the notorious Green Box to continue
and even increase them without limits."
The letter highlighted that the US has more than doubled its subsidy
from $61 billion to $130 billion between 1995 and 2010, while the
EU's subsidy of 90 billion euro (1995) came down to 75 billion euro
in 2002, but rose again to hover between 90-79 billion euro between
Ironically, according to a study, India will provide 60kg/person of
food-grains under the newly enacted Food Security Act while the US
provides 385kg/person for food aid under several programmes like the
food coupons, child nutrition programmes etc.
In 2010, the US spent $94 billion for its food aid programmes, which
in 2012 reached $100 billion. Against this, India's food subsidy bill
is expected to be around $20 billion.
"Even this is not tolerable to the US and the EU," said
So, it added, forty-seven years after the Green Revolution was launched,
India is now being virtually asked by the developed countries at the
World Trade Organisation (WTO) to dismantle the food procurement system
built so assiduously over the past four decades.
"The grave implications of this ill-advised move, is aimed not
only at destroying the country's hard-earned food security but also
the livelihood security of over 600 million farmers, 80 per cent of
them being small and marginal farmers."
Noting that WTO Director-General, Roberto Azevedo, has suggested a
final text on the peace/due restraint clause in a "take it or
leave it" manner, the farmers' groups however highlighted several
problems with the text.
First, they said, this suggests only a four-year Peace Clause which
will elapse at the 11th Ministerial and is not linked to a permanent
Second, only a few crops can be supported under this provision.
Third, a large number of conditionalities are being imposed on this
Peace Clause "which will make it unusable and meaningless",
said the letter to the Indian Prime Minister.
It noted that the Anti-Circumvention/Safeguard clause suggests that
the member state using this "shall ensure that stocks procured
under such programs do not distort trade".
"This leaves the provision totally porous, subject to interpretation
which can be used to challenge the very operation of such stockholding
programmes," the letter stressed.
"Knowing the hardening positions, it does not make any sense
for India to trade off the very survival of its 600 million farmers
and roughly 830 million hungry for the sake of a successful Doha round
(Bali package)," the farmer's groups said.
India cannot dilute its position on the G-33 proposal and accept a
Peace Clause which makes a travesty of the poverty and hunger faced
by millions of Indians every day, they added.
"Nor can India be allowed to mortgage its right to food and the
right to livelihoods of the poor and the needy enshrined in the Constitution.
Accepting the Peace Clause and the current text suggested by the Director-General
therefore would be detrimental to India's interests," the letter
"India should not trade-off its food security concerns and the
livelihood security of millions of farmers against the trade facilitation
agreement. The latter is unfair, biased and forwards only a developed
country agenda as it stands at the moment," the letter concluded.