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23rd May 2022 (5 Topics)

India may push for permanent food stock rules


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.


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

India’s stand

  • 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.
  • Although India is seeking amendments in the formula to calculate the food subsidy limit.
  • 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.
  • The 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 Bali’s peace clause

  • Trade negotiators generally refer to Article 13 of the World Trade Organization's Agreement on Agriculture as the Peace Clause.
  • It is now possible, therefore, for developing countries and nations favouring free trade in agricultural goods.
  • Another temporary peace clause was made at the WTO Bali conference in December 2013.
    • It stipulated that no country would be legally barred from food security programs for its own people even if the subsidy breached the limits specified in the WTO Agreement on Agriculture.

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