In recent times, the Bali Package was making news. Consider the following statements in this context:
1. The Agreement on Agriculture (AoA) bars the public procurement and stockholding meant for food security
2. The Bali Package allows the developing countries to continue their public stockholding programmes for food security
Which among the above is / are correct statements?

Answer: [B] Only 2

Economic Survey – 4.25 to 4.28

India’s Stance at WTO talks and Bali Package

The agricultural trade rules in the WTO’s Agreement on Agriculture do not bar public procurement and stockholding for food security.

However, if food for such programmes is acquired at administered prices and not market prices, then this is deemed a support to farmers.

As per WTO rules negotiated in the Uruguay Round, all such support has to be kept within a limit of 10 per cent of the value of production of the product in question. This cap can constrain procurement and food aid programmes in developing countries. The WTO rules, made keeping the interests of the developed countries uppermost, have overlooked the interests of the developing countries.

The draft agriculture negotiating text of December 2008 seeks to change this. It contains a proposal to revise the rules, however, as the negotiations have not concluded, this remains an unfinished agenda. India, as part of a coalition of developing countries known as the G-33, proposed an amendment to the WTO’s Agreement on Agriculture to change these rules.

The G-33 proposals, as well as various alternatives suggested by the Group, met with resistance. Negotiations continued during the Bali Ministerial Conference. The finally agreed text of the Ministerial Decision provides for Members to put in place an interim mechanism and to negotiate on an agreement for a permanent solution for adoption by the Eleventh Ministerial Conference of the WTO.

In the interim, until a permanent solution is found and subject to certain conditions, Members were to be protected against challenge in the WTO under the Agreement on Agriculture in respect of public stockholding programmes for food security purposes. Post Bali, the focus of the developed countries was only on the implementation of the TFA.

Concerned at this uneven progress India took the stand in July 2014 that without a firm commitment to implement the other Bali Decisions, it would be difficult to join the consensus on the Protocol of Amendment to incorporate the TFA into the umbrella WTO Agreement. 4.27 Despite the general campaign of misinformation that followed about missing the deadline for the TFA and the effect of the impasse on the future of the WTO, India stood firm.

Concerted efforts were made to explain the concerns underlying the stand taken and India worked with other WTO members to find a way forward. On 27 November 2014, the General Council of the WTO adopted a Decision on Public Stockholding for Food Security Purposes, a Decision on the TFA and a Decision on Post Bali Work.

The General Council Decision on Public   Stockholding for Food Security Purposes makes it clear that a mechanism under which WTO members will not challenge the public stockholding programmes of developing country members for food security purposes, in relation to certain obligations under the WTO Agreement on Agriculture, will remain in place in perpetuity until a permanent solution regarding this issue has been agreed upon and adopted. The decision also includes a commitment to find a permanent solution on public stockholding for food security purposes by 31 December 2015 on a best endeavour basis and has a firm commitment to engage in negotiations for a permanent solution through an intensified programme of work.

The decision addresses India’s concerns on the issue of public stockholding for food security purposes. The Tenth Ministerial Conference of the WTO (MC10) will be held in Nairobi, Kenya, from 15 to 18 December 2015. WTO members are engaged in discussion to finalize the work programme to conclude the remaining issues of the Doha Development Agenda.

This question is a part of GKToday's Integrated IAS General Studies Module