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Home / News / World /  India proposes options for permanent solution on food security at WTO

India proposes options for permanent solution on food security at WTO

According to the joint proposal, the public stockholding programmes for food security purposes should be allowed and considered to be in compliance with the WTO rules if a set of conditions are met.

  • One of the proposals recommend adjusting for excessive inflation the external reference price to arrive at the minimum support price ceiling of 10% of the total value of production of the crop currently allowed under WTO rules. This support is currently calculated at 1986-88 prices

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BENGALURU: India along with the G-33 grouping and African nations have proposed a host of options providing a permanent solution for public stockholding of foodgrains at the upcoming ministerial meeting in Geneva this month that would give them flexibility to give out higher farm support.

BENGALURU: India along with the G-33 grouping and African nations have proposed a host of options providing a permanent solution for public stockholding of foodgrains at the upcoming ministerial meeting in Geneva this month that would give them flexibility to give out higher farm support.

The G-33, African Group, and the ACP (Africa, Caribbean, and Pacific) have submitted a joint proposal to the Committee on Agriculture on the issue even as most developed countries attempt to defer the issue to the next ministerial meeting.

The G-33, African Group, and the ACP (Africa, Caribbean, and Pacific) have submitted a joint proposal to the Committee on Agriculture on the issue even as most developed countries attempt to defer the issue to the next ministerial meeting.

“The G-33, African and the ACP countries have joined hands and are seeking a permanent solution on the public stockpiling issue in the ministerial this month, suggesting options that could be considered to calculate subsidies with a more relevant and acceptable way that are fair and would give a level playing field to developing countries," said a source.

“The G-33, African and the ACP countries have joined hands and are seeking a permanent solution on the public stockpiling issue in the ministerial this month, suggesting options that could be considered to calculate subsidies with a more relevant and acceptable way that are fair and would give a level playing field to developing countries," said a source.

One of the proposals recommend adjusting for excessive inflation the 'external reference price' to arrive at the minimum support price ceiling of 10% of the total value of production of the crop currently allowed under WTO rules. This support is currently calculated at 1986-88 prices. The other option proposes taking the three-year average price of a crop based on the preceding five year period excluding the highest and the lowest entry for that product. It has also demanded that subsidy calculations be based on actual procurement and not on all eligible production.

One of the proposals recommend adjusting for excessive inflation the 'external reference price' to arrive at the minimum support price ceiling of 10% of the total value of production of the crop currently allowed under WTO rules. This support is currently calculated at 1986-88 prices. The other option proposes taking the three-year average price of a crop based on the preceding five year period excluding the highest and the lowest entry for that product. It has also demanded that subsidy calculations be based on actual procurement and not on all eligible production.

"This proposal allows an updating of the outdated 1986-88 external reference price based on current global prices or inflation rates. It also demands that subsidy calculations should be based on actual procurement and not all eligible production. This will be of great use to India and other developing countries who rely on price support for the benefit of its farmers," said Ranja Sengupta from Third Word Network.

"This proposal allows an updating of the outdated 1986-88 external reference price based on current global prices or inflation rates. It also demands that subsidy calculations should be based on actual procurement and not all eligible production. This will be of great use to India and other developing countries who rely on price support for the benefit of its farmers," said Ranja Sengupta from Third Word Network.

According to the joint proposal, the public stockholding programmes for food security purposes should be allowed and considered to be in compliance with the WTO rules if a set of conditions are met. The conditions include, the stocks acquired under public stockholding programme should not distort trade or adversely affect food security of other members. Besides, members shall endeavour not to export from acquired stocks, except for the purposes of international food aid, or for non-commercial humanitarian purposes, or when requested by Net Food-Importing Developing Countries and least developed countries in the same geographic region or in any other region, or any member facing food shortages and higher food inflation during international food crisis.

According to the joint proposal, the public stockholding programmes for food security purposes should be allowed and considered to be in compliance with the WTO rules if a set of conditions are met. The conditions include, the stocks acquired under public stockholding programme should not distort trade or adversely affect food security of other members. Besides, members shall endeavour not to export from acquired stocks, except for the purposes of international food aid, or for non-commercial humanitarian purposes, or when requested by Net Food-Importing Developing Countries and least developed countries in the same geographic region or in any other region, or any member facing food shortages and higher food inflation during international food crisis.

“We are facing pressure from other countries to reduce the subsidy given to our farmers. But the subsidy we give is far less than what the US and EU give. Indian government subsidy to farmers comes in at $300 per farmer, compared to $40,000 per farmer in the US," said a government official.

“We are facing pressure from other countries to reduce the subsidy given to our farmers. But the subsidy we give is far less than what the US and EU give. Indian government subsidy to farmers comes in at $300 per farmer, compared to $40,000 per farmer in the US," said a government official.

Although an interim.peace clause was put in place in 2013 under the Bali Agreement to protect developing countries from being challenged for breach of subsidy levels, it comes with onerous conditions including a host of notification requirements, making it difficult to use. India breached the 'de minimis' level or the 10% ceiling on rice three years ago, and has been invoking the peace clause for legal protection.

Although an interim.peace clause was put in place in 2013 under the Bali Agreement to protect developing countries from being challenged for breach of subsidy levels, it comes with onerous conditions including a host of notification requirements, making it difficult to use. India breached the 'de minimis' level or the 10% ceiling on rice three years ago, and has been invoking the peace clause for legal protection.

India had informed WTO that the value of its rice production in 2019-20 stood at $46.07 billion and that subsidies worth $6.31 billion, or 13.7%, were given, above the 10% limit.

India had informed WTO that the value of its rice production in 2019-20 stood at $46.07 billion and that subsidies worth $6.31 billion, or 13.7%, were given, above the 10% limit.

In case of wheat, though, the ceiling has not been breached. India banned wheat exports earlier this month, citing rising prices in the country.

In case of wheat, though, the ceiling has not been breached. India banned wheat exports earlier this month, citing rising prices in the country.