India has opposed efforts of 10-member group of developed and developing countries, which has called for consultation on the food subsidy programme at the World Trade Organization (WTO) in a group format rather than bilaterally.
Key points
- The US, European Union (EU), Australia, Canada, Japan, Brazil, Paraguay, Uruguay and Thailand has informed the Agriculture Committee of the WTO that, in accordance with paragraph 6 of the Bali Ministerial Decision on Public Stockholding for Food Security Purposes (PSH), they had invited India to engage in a technical dialogue regarding the operation of its PSH programmes.
- Under WTO rules, developing countries such as India need to limit their public procurement through minimum support price (MSP) of foodgrains such as wheat and rice to within 10 per cent of the value of the crop.
- After India enacted the National Food Security Act, 2013, the demand for public procurement increased significantly.
- At the Bali ministerial conference in December 2013, India secured a so-called “peace clause.” Under it, if India breaches the 10 per cent limit, other member countries will not take legal action under the WTO dispute settlement mechanism.
- However, the concession also comes with onerous notification obligations about farm subsidies provided in the previous year.
- India has invoked the peace clause for paddy at the WTO, some member countries are not happy with the details provided by India.
- The EU has said India did not disclose the value of production of many subsidised items such as wheat and pulses, among others.
- India provided the details while maintaining that according to the Handbook of Notification Requirements, it is not mandatory to include the value of production in the notification.
- In the past, the US had alleged that India’s MSP programmes for wheat and rice breached India’s permissible levels of trade, distorting domestic support at the WTO. India has rejected the this charge.
Public Stockholding Programme
- Public stockholding programmes are used by some governments to purchase, stockpile and distribute food to people in need.
- While food security is a legitimate policy objective, some stockholding programmes are considered to distort trade when they involve purchases from farmers at prices fixed by the governments, known as “administered” prices.
(Source: Business Standard)
