India’s unrealistic demands sank WTO agri talks, claims commissioner

Despite an eleventh-hour attempt, the more than 1000 WTO delegates gathered in Abu Dhabi last week failed to agree to a major reform of the global trade rules for food subsidies.

“We did not progress on an agriculture package, to the detriment of most vulnerable countries, despite our pragmatic engagement. Divergences were too large to be solved,” said Commission Executive Vice-President Valdis Dombrovskis in a statement.

The bloc’s Commissioner for Agriculture Janusz Wojciechowski went further, saying the reason WTO members could not finally agree fell to “to unrealistic demands, in particular on the issue of public stockholding for food security purposes”.

Throughout the negotiations, India played hardball on the matter and led countries seeking to find a permanent solution to the so-called public stockholding (PSH).

This is a policy tool used to stockpile and distribute food, such as providing quantities of grain at subsidised prices to vulnerable population groups to lower the price of food for the most exposed.

Current WTO rules set a limit to the percentage of a country’s production that can be used for this form of agricultural subsidy – a threshold that India and other less-developed countries want to see raised.

Experts backing these countries argue that stricter WTO rules on PHS will not allow governments to build and manage public food reserves.

Such stockpiling is seen as running counter to free trade principles, however, particularly during crises, and has always been a red line in EU trade talks involving global food security.

“While public stockholding programs may be essential to contribute to domestic food security, if implemented as support to producers’ prices, they may negatively affect agricultural trade and impact food security of other countries,” the Commission said in a note.

The topic received renewed attention after Russia’s full-scale invasion of Ukraine which severely impacted food commodity markets.

In the aftermath of Ukraine’s war, the EU and other Western countries stressed the need for trade flow to continue for all stocks, while India and its allies defended their right to safeguard food stocks for their populations.

During the talks, India argued that a permanent solution on food stockpiling has been pending for 11 years since 2013.

A source close to the negotiations told Euronews that the most likely outcome at the beginning of the talks was a commitment to a new deadline for a PHS agreement without any substantial decision on the matter.

Contrary to expectations India’s Trade Minister Piyush Goyal stood firm on its negotiating mandate and refused to compromise on the matter.

The issue was sensitive for the Indian government as country’s farmers have been protesting for more than 12 months and Indian premier Narendra Modi is seeking re-election in a national poll slated for this April and May.