Under the Agreement on Agriculture(AOA), subsidies in the nature of domestic support measures and export subsidies are exempted up to 10% of the value of agricultural production (prices taken for the base period 1986-88) from any challenge at the WTO . The proposed peace clause would exempt subsidies in excess of the 10% limit for a period of just four (4) years. The total subsidy under the Food Security Act in India may exceed the 10% limit in the very first year given the current level of Minimum Support Prices (MSPs) and the subsidized rates under the Food Security Act (FSA) . The total subsidy basket would further go up as MSPs and procurement costs rise in the coming years. India needs to comprehensively protect these subsidies on a permanent basis if there is to be sincere and meaningful food security for Indians. This peace clause seeks to provide only a semblance of protection for a period of 4 years. Our food security programmes would still be exposed during this period to punitive action under the Agreement for Subsidies and Countervailing measures. This may force India to substantially limit the food security programme immediately. The much-hyped food security for Indians would eventually come to a naught in just 4 years if this peace clause is acceded to.

The peace clause in its current form is not in our interest. We can not compromise on the livelihood of millions of subsistence farmers in India . We can not accept any limitations on our food security programme. India should persist with its demand for a “Food Security” Box which would protect on a permanent basis the price support to farmers (MSPs) and food subsidy to millions of vulnerable Indians.