60 WTO Nations Support New Method on Food Subsidies

At least 60 countries, including India, China, Pakistan, Egypt, Indonesia, and South Africa, have proposed a new system to assess subsidies paid to purchase, stockpile, and distribute food to maintain Food Security for emerging and impoverished nations ahead of a major WTO ministerial conference this month.

The G33, African Group, and ACP (African, Caribbean, and Pacific) groups submitted a joint proposal to the World Trade Organization on Tuesday, stating that a permanent solution for public stockholding should account for inflation and be based on a recent reference price rather than an old one based on 1986-88 prices.

They suggested allowing exports of food grain from public inventories to needy countries for international food aid and humanitarian objectives.

An official said, “The proposal has a huge political weight behind it, and it is crucial as such a large number of countries have come together at a time when global food prices are rising and they need to ensure public stockholding of food." 

They propose a new system for calculating subsidies that accounts for "excessive inflation" in the External Reference Price (ERP) or calculates the ERP based on the last five years, eliminating the highest and lowest entry for that product. ERP is the average price based on the base years 1986-1988, and it hasn't been updated in decades.