Ending months-long deadlock, the WTO has approved a trade facilitation agreement (TFA) while agreeing to India's demand for continuing the peace clause till a permanent solution is found to the food stockpiling issue, crucial for continuing food security scheme. The WTO's General Council, the highest decision making body met in Geneva yesterday and accepted India's demand for extending the peace clause till a permanent solution is found for its food stockpiling issue.

Under the peace clause, a WTO member gets immunity against penalty for breaching the food subsidy cap. As per the WTO norms, a developing nation can provide food subsidy of upto 10 percent of the total farm output.
The General Council said that that if a permanent solution for the issue of public stock-holding is not agreed and adopted by the 11th Ministerial Conference in 2017, the mechanism shall continue to be in place until a permanent solution is agreed and adopted. The historic TFA would now need to be ratified by governments of individual member countries, including India, for coming into effect which is expected some time next year.

WTO Director General Roberto Azevedo said this is a very important moment for the multi-lateral trade body. This decision is crucial for India to meet over Rs one lakh crore a year food security programme, which needs 62 million tonnes of foodgrain in a year. This will enable India to continue procurement and stocking of foodgrain for distribution to poor under its food security programme without attracting any kind of action from WTO members.