As a member of World Trade Organization (WTO), mention the domestic support measures available to countries under the Agreement on Agriculture. In this context, analyse the ‘peace clause’ provision.
The agreement on agriculture, crucial aspect of Doha dialogue under WTO, aims to arrive at consensus on extent of domestic support countries can extend to their agriculture sector.
Domestic Support Measures:
- Food security program – E.g. National food security act, 2013 and India’s Public Distribution System.
- Poverty alleviation programs – undertaken to secure income of producers and access to nutritious food to consumers.
- Subsidies (non-distorting in nature such as green box, blue box) aimed at domestic support.
Concerns:
- Developing nations like India have been seeking exemption from limitations on domestic support as the support does not distort global trade rather protect its domestic stakeholders.
- Developed nations extend subsidy hundred times of developing nations. E.g. US-$7499; India-$442.
- Non-tariff barriers like sanitary & phytosanitary restrictions create greater distortion.
Peace Clause:
- Doha amendment allowed India to extend domestic support in excess of 10% limit for next 4 years.
- The provision serves as temporary relief measure to continue its programs like MSP, PDS.
- However, India has been insisting on complete exemption in light of peculiar socio-economic circumstances.
The subsidies are not directed at export promotion rather security of income and livelihood of its population and thus, must not be limited by external actors.
Topics: GS-II: Bilateral Regional and Global Groupings and Agreements • GS-III: Issues Related to Direct and Indirect Farm Subsidies and Minimum Support Prices