India- U.S. Agreement on Food Stockpiles: Clearing the Way for the Doha Development Round
By admin December 10, 2014

India-U.S. food stockpile

Difficulty on reaching a consensus to further agricultural trade liberalization has been one of the key factors that impede the multilateral negotiation of the Doha Development Round, which is the latest and largest round of trade negotiations among the World Trade Organization (WTO) members with the aim to achieve major reform of the international trading system. The Doha Development Round commenced in 2001, but impasse in agriculture negotiations in 2008 stalled the trade talks.  Negotiations broke down as they failed to reach a compromise on agricultural import rules among India, U.S. and China. Therefore, the recent India-U.S. agreement on India’s massive food-stockpiling program is a significant step that might potentially clear the way for the next Doha Development Round.

For many countries, agricultural-trade reform is politically sensitive, especially to countries such as China and India with a large population that needs to be fed. Agricultural sector protection is a vital issue to ensure these nations’ food security. India, for instance, is home to more than 25% of the world’s hunger population. The exploding population means that there food production cannot meet the increasing demand. New Delhi spends more than USD $60 billion a year on public food distribution, input subsidies and price support subsidies to farmers. In past years, India had made several attempts to ensure its food security, but most failed. For example, in August of 2014, India had pushed for concessions on agricultural stockpiling and vetoed plans for universal custom rules, but the concessions were not granted at the WTO meeting. Also trade facilitation was non-existent when India demanded the exclusive rights to subsidize and stockpile grains, which is not permitted by the WTO rules.

Under the new agreement between the U.S. and India, the U.S. agreed to protect India’s goods purchase and distribution scheme from legal challenges over exports of surplus grain stocks accumulated in the government warehouses. According to the Indian Commerce Minister, Nirmala Sitharaman, the U.S. has agreed to give India more freedom to subsidize and stockpile food in the efforts to feed its people and support its farmers. Food stockpiling is a large supply of food gathered and held in reserve for use during a shortage or during a period of higher prices, and thus is a necessity for India and many other countries. The U.S. clarified India’s position which allows an extended time period of 4 months to negotiate a final deal at the WTO on food security. After compromising with the U.S. and ensuring the adequate amount of food stockpiling and subsidies, India is closer than ever before to ratify the important agreements previously initiated at the Doha Development Round. It is very important watch to see if the agreement will be fully implemented, and, if it is, it definitely will help clear the way for the Doha Development Round and reducing the number of people suffering from hunger.

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