Ahead of the next World Trade Organisation (WTO) ministerial meeting,
India has begun aggressive lobbying to get legal shelter for subsidy on
rice exports to the world market, a move likely to affect Pakistan’s
rice exports.
The issue of seeking more protection for Indian rice
exports came up during the G-33 countries recent consultations in
Geneva as part of the proposals on agriculture reforms for Bali meeting
to be held in December.
“Pakistan is in the middle ground with China and Indonesia, which are in favour of enlarging the green box subsidies — non-prohibited subsidies — but no exemption to trade distorting support”, a trade official told Dawn.
India is seeking
huge flexibility to distort rice production and trade in the name of
food security, but trade experts says it will take away food security of
rest of the small countries whose farmers depend on the production and
export of rice.
As a result of trade distorting subsidies in
India, Pakistan has already lost its market share in rice exports to
India in the last couple of years owing to subsidised Indian exports to
the world market.
Pakistan lost its position because of the
aggressive exports from the stocks maintained by Food Corporation of
India, a state-owned organisation.
Pakistan exported rice worth
US$1.756 billion in July-May period in 2012-13 as against $1.908 billion
over the corresponding period last year, reflecting a decline of over
seven percent.
The impact of the trade distorting subsidy was not
limited to Pakistan’s exports of rice because Thailand and Vietnam were
also no more the first two exporters of the world as this position was
taken over by India. India has already taken number one position in
exports by releasing stocks which are highly subsidised.
“Indian
stocks are much higher than what they need. The result is that
government warehouses were over utilised and finally the stocks are
exported at subsidised prices,” the source further said.
Contrary
to this, government of Pakistan came out of the business of rice export
two decades ago and the rice exports have become a steady source of
foreign exchange for the country and the whole business was carried out
the private sector.
Experts says it was a need of the time, that
Islamabad should uphold WTO disciplines to protect Pakistan rice exports
worth 2bn dollars and invest in research, pest eradication, storage,
improvement in yield and develop varieties which consume less water.
G-33
proposal is demanding exemption from domestic support (aggregate
measurement of support) on this assumption that it is minimally trade
distorting and it is linked with the food security of the country. The
objective of stock holding programs is to ensure food security of your
own population.
India has recently passed an ordinance on food
security which is nothing short of a government takeover of the two
major commodities (wheat and rice).
India is already a big
exporter of these commodities; they have had bumper crops and are
seeking additional flexibility from the WTO to subsidise these
commodities in the name of food security.
Production of these two
commodities is highly subsidised in India, further policy space would
mean that it will have adverse impact on the food security of other
smaller developing countries, which may not be very big exporters but
will lose their market share due to subsidised Indian exports to the
world market.
Such an exemption is possible for a product which
has shortage in the country and food security needs of the population
are heavily dependent on that product.
In case of rice, India is the largest exporter of rice therefore any exemption of rice will always be trade distorting.
It
will have huge impact on the food security of other countries whose
farmers earn money through exports or by selling to domestic market.
“If
WTO provides any flexibility to India for distorting market it will be a
huge mistake and will have very negative impact on food security of the
world,” the experts suggested, adding: “We should go for sustainable
production. They must fix their policy and follow market mechanism. WTO
is about markets, it cannot support government takeover of the whole
production, distribution, warehousing, exports etc.”
An official
of the commerce ministry said Pakistan is a member of G-33 and supports
food security for all. “We encourage countries to invest in research and
rely on investment and agrarian reforms rather than trade distorting
subsidies for food security,” the official commented.
These are green box subsidies and ensure level playing field for every one, the official added.
“We
will lose our competitiveness if additional flexibilities are given for
distorting trade and production of rice. Such an undermining of the WTO
rules would have a severe impact on the livelihood of poor farmers in
Pakistan,” the official added.
