WTO talks end with no consensus on agriculture support

Negotiations at the WTO’s 13th Ministerial Conference, which concluded on March 2, 2024, failed to achieve any outcome on public stockholding (PSH) for food security and domestic support for farmers in developing countries, including India, which has been demanding a permanent solution on these issues. 

The conference, which was originally scheduled for February 26-29 in Abu Dhabi, was extended by a day amid hectic parleys to narrow differences between developed and developing countries on crucial issues such as agriculture and fisheries subsidies. But the extra day didn’t end the impasse. 

Public stockholding and food security

India and 80 other countries have been negotiating a permanent solution for public stockholding (PSH) of food instead of temporary measures. PSH and other measures like subsidies and minimum support prices (MSP) are viewed as trade-distorting domestic measures by the developed world and have been a long-pending mandated issue at the World Trade Organization (WTO). 

India has argued that the focus should not be narrowed down to the trade interests of exporting countries only; the real concern is the food security and livelihood of people. 

The country emphasised that without a permanent solution to PSH, developing countries’ fight against hunger cannot be won, the Union ministry of commerce and industry had earlier said in a statement.

A few days before the conference commenced, on February 16, the chair of the committee on agriculture placed a draft text in the public domain. This draft had placed New Delhi’s demands in square brackets, indicating a lack of consensus.

Ngozi Okonjo-Iweala, director-general, WTO, said that having the text was an important step to continue working on these issues.

“You might ask why this is so important; we haven’t been able to even have a text that everybody agrees to negotiate on, so for the first time we had that. Even though we couldn’t close everything, in Geneva we will be able to continue work to close these issues,” she said in a press conference held after the closing ceremony, in the early hours of March 2. 

In her address to the press, the director-general said that it was an intense week of negotiations. “When the conference started, we had a press meeting and I had talked about uncertainty of world environment, the strong headwinds that we face against the backdrop of the war in Ukraine and the disruptions in the Middle East and a high inflationary environment in the world, many countries experiencing a low aggregate demand, elections in more than 60 countries, and I said trying to get achievements against these headwinds would be tough.”

Thani Bin Ahmed Al Zeyoudi, minister of state for foreign trade of the United Arab Emirates (UAE) and MC13 chair, said, “We had excellent deliberations on some of the topics. For example, on-/- agriculture, we managed to have a text which was under negotiation. Because of paucity of time, we couldn’t do it. For more than 20 years, the topic was not moving but we managed to have a text which is going to be the basis for discussions in Geneva and MC14. So at least we have a very strong basis to be considered from here.” 

At the start of the conference, India had argued that it doesn’t want to take the issue to the next ministerial meeting and wants a permanent solution in MC13. 

India, together with the developing G33 countries, the African Group, and the African, Caribbean and Pacific Group of States, has emphasised standalone outcomes on the PSH programme. These countries represent more than 61 per cent of the world’s population.

The PSH policy makes it possible for the government to procure crops like rice and wheat from farmers at MSP, store and distribute these food grains to the poor and is thus essential for India’s food security strategy.

Currently, under global trade norms, a WTO member country’s subsidy bill should not breach the limit of 10 per cent (for developing countries) and five per cent (for developed countries) of the value of production-based on the reference price of 1986-88. These allowances are called de minimis limits. 

But this minimum support limit is also tilted in favour of developed countries, experts point out. 

“Global South countries have been demanding outcomes on these mandated issues in order to get the needed policy space to meet their food security and livelihood concerns. Many of these mandates are much more than a decade old. There is nothing for Net Food Importing Developing Countries and LDCs either. While Nairobi mandates on these issues will continue it is clear that the WTO is massively trailing behind on commitment to deliver on its promises,” Ranja Sengupta, senior researcher and legal advisor, Third World Network, said.  

Apart from increasing this de minimis limit, India has asked for amendments in the formula to calculate the price support subsidies given to farmers for government procurement. Currently, it is calculated as the reference price for 1986-88. This, the developing countries, said, is a flawed calculation.

They have said, time and again, they are facing barriers in their policy space to adequately support agricultural production and farmers’ livelihoods due to such rules.

The proposal text stated that the reference price should be either of the following:

• the three-year average price based on the preceding five-year period excluding the highest and the lowest entry for that product; or
• adjusted for excessive inflation.

European Trade Commissioner Valdis Dombrovskis expressed disappointment over the lack of consensus on fisheries, agriculture and broader reforms, the media reported, and singled out India for blame.

No agreement on fisheries text

However, India’s Union Commerce and Industry Minister Piyush Goyal said it is a “good outcome”. “We have not lost out on anything. I go back happy and satisfied,” Goyal told reporters. 

The negotiations on fisheries “came close” to a deal, according to Okonjo-Iweala and Ahmed Al Zeyoudi, but “one or two matters” could not be reached. 

The agenda for the WTO members was to discuss how to curb harmful fisheries subsidies that contribute to overcapacity and overfishing. 

The Agreement on Fisheries Subsidies (AFS) was signed in 2022 at the 12th Ministerial Conference (MC12) of the WTO but covered prohibiting subsidies for only illegal, unreported and unregulated fishing and overfished stocks, two of the three pillars under which negotiations have evolved. The third pillar concerns subsidies that contribute to overfishing and overcapacity.

However, for the Agreement to be operational, two-thirds of WTO members have to deposit “instruments of acceptance” at the WTO. Till now, 71 members have deposited these, and 40 more formal acceptances are needed for it to come into effect. India is one among those that have yet to ratify the agreement.

The draft text on curbing fisheries subsidies that contribute to overfishing and overcapacity proposed that member countries would have to demonstrate sustainability considerations for the fish stock on which subsidies were offered. 

It is a negotiating priority for developing countries, including India, as they maintain that they need a transition period to address their development needs and ensure their livelihoods. 

India has argued that developed countries have depleted marine resources through industrialised overfishing and deep-water fishing.

Parties negotiated a new draft text until late on March 2 but could not reach a consensus. There was some headway for the developing countries in the new draft text as it removed the geographical limit prescribed for exemption to small-scale fisherfolk for subsidies. 

The earlier draft text allowed exemption for small-scale fisherfolk but the distance allowed for such fishing was between 12 nautical miles and 200 nautical miles. Small fisherfolk in India and even in other countries go beyond this limit. However, there is more clarity needed on how to define ‘small-scale fishers.’

“For small-scale fishers, these negotiations have constantly represented a threat to our livelihoods and ability to fish. While there had been some improvements to protect artisanal fishers from the prohibitions in this text, it wasn’t enough to justify a deal,” said Olencio Simoes, General Secretary, National Fishworkers Forum, India. 

Another thorny issue was the transition period. According to the draft, members of the least-developed countries (LDC) and developing countries, with a global share of marine catch not greater than 0.8 per cent (de minimis) would be excluded from the core prohibition on subsidies. 

Countries not falling into either of the other groups would have to demonstrate fulfilling the sustainability-based conditions outlined in the draft text in their regular notifications of fisheries subsidies. 

India’s global share of marine catch is greater than 0.8 per cent (between 4-5 per cent) and thus becomes excluded from the prohibitions. 

India has sought a blanket exemption from subsidy cuts for all its fishers for a ‘transition period’ of 25 years to address their development needs and ensure their livelihoods. Meanwhile, the developed nations want to limit this period to no more than seven years.

“We worked hard on the issues of fisheries and we hope to close the negotiations, we came so close but at the end of the day one or two matters we could not breach, (they) need more consultation by people here at home, more thought, more engagement to overcome,” said Okonjo-Iweala. 

Meanwhile, the ministers adopted a Ministerial Decision that responds to a 23-year-old mandate to review special and differential treatment provisions for developing countries and LDCs, with a view to making them more precise, effective and operational. 

“This is a win for development, one that will help enable developing countries, especially LDCs, to fulfil their WTO commitments, exercise their rights and better integrate into global trade,” said Okonjo-Iweala.