WTO must review food subsidy rule, says Sitharaman

Under Peace Clause, WTO members agreed to refrain from challenging any breach in prescribed ceiling by a developing nation at the dispute settlement forum of the WTO. This clause will stay till a permanent solution is found to the food stockpiling issue.

- Gulveen Aulakh

The World Trade Organization must revisit the prickly issue of food and fertilizer subsidies as both have become critical to developing economies but are not taken into account while deciding tariff and pricing rules, finance minister Nirmala Sitharaman said at the Asian Development Bank’s annual general meeting.

Sitharaman, who was speaking at bank seminar on ‘policies to support Asia’s rebound’, said the issue of food security had become even more critical owing to increasing uncertainties following the covid pandemic and the Russia-Ukraine war, which had made transit of goods difficult and led to rising commodity prices.

Therefore, the lopsided way in which agreements had been concluded without accounting for food and fertilizer subsidies needed a relook at the WTO.

“Since the time when WTO was founded, it has had these agreements that export of agricultural produce, and also generally the trade, (where) the voice of the South, or the emerging markets has not been heard at par with the voice of the developed countries. Subsidies for agriculture become critical for many of our economies, but those subsidies didn’t get counted at all," she said.