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India  may push for permanent food stock rules

India is seeking amendments in the formula to calculate a country’s food subsidy limit, which current WTO rules state should not breach 10% of the value of production based on the base price of 1986-88. (Photo: Alamy)Premium
India is seeking amendments in the formula to calculate a country’s food subsidy limit, which current WTO rules state should not breach 10% of the value of production based on the base price of 1986-88. (Photo: Alamy)

According to current WTO rules, a member country’s food subsidy should not breach 10% of value of production based on the base price of 1986-88, but India is seeking amendments in the formula to calculate the food subsidy limit.

NEW DELHI : India may seek a permanent solution to the issue of public stockholding for food security during the 12th World Trade Organization (WTO) ministerial conference starting on 12 June in Geneva.

According to current WTO rules, a member country’s food subsidy bill should not breach 10% of the value of production based on the base price of 1986-88, but India is seeking amendments in the formula to calculate the food subsidy limit.

“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," an official said.

India is also seeking to add government programmes that were started after 2013 in the peace clause agreed in the Bali ministerial meeting.

Under this clause, WTO members agreed to refrain from challenging any breach of the prescribed ceiling of 10% by a developing nation.

In essence, developing countries cannot be taken to arbitration as they are protected under the peace clause. However, the clause is applicable till a permanent solution is reached.

“Currently, the peace clause only includes the government programmes started before 2013. India wants government programmes started after 2013 to be included in the calculation," the official said.

Queries sent to the commerce and industry ministry spokesperson remained unanswered until press time.

Last year, India invoked the peace clause at the WTO for exceeding the 10% ceiling on the support it offered to its rice farmers.

However, government officials said that India had not breached the ceiling for wheat, the export of which was banned earlier this month.

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 is not the only country looking for a permanent solution to public stockholding programmes.

Developing nations such as China and African nations part of the G33 group have also raised this issue at WTO.

Last year at WTO, G-33 countries stated that government procurement made under minimum support price (MSP) would not be used for exports.

“WTO rules do not allow export of commodity from public stock because it distorts prices, which affects other countries. However, the same is allowed if exports are done at market prices. Other countries argue that you (India) give subsidy on the production as well as at the distribution end," the official further explained.

Another issue that could be raised by other WTO countries could be with regard to India’s contribution to the World Food Programme (WFP).

“But India has been giving grains for WFP. It must be noted that grains given under WFP are excluded from the wheat export banned announced earlier," the official further added.

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