India opposes group consultation on food subsidies programme at WTO

India has opposed efforts of a 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.

Speaking at the WTO General Council meeting on October 7, India’s ambassador and permanent representative to the WTO Brajendra Navnit said he doesn’t understand the “hesitancy” of the countries to consult bilaterally.

“The Bali decision has not given this format of consultation. And in the WTO, this is the first time I am hearing that members are not interested in bilateral discussion to solve the problem. So sometimes, I wonder if this is all created just for demonstration to show something back home or actually these members are interested in finding a solution to their doubt or clarification, which can be better addressed in a bilateral interaction,” he said.

The US, European Union (EU), Australia, Canada, Japan, Brazil, Paraguay, Uruguay and Thailand had 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.

The members had expressed concern with India’s “lack of full transparency” in taking recourse to the Bali Decision as well as in replies to certain questions raised in the Agri Committee. 

Those members considered that receiving further information on this matter would facilitate engagement and a meaningful policy dialogue.

Navnit said since the group consists of both developed and developing countries as well as food importing and food exporting countries, bilateral consultation is a better option. This is because “these four sets of countries will have different sets of clarifications and questions.”

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, which aimed to provide subsidised foodgrains to approximately two-thirds of its 1.3-billion population, 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. 

Though India has invoked the peace clause for paddy at the WTO, some member countries are not happy with the details provided by India.

For example, the EU has said India did not disclose the value of production of many subsidised items such as wheat and pulses, among others.

In its reply, 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 New Delhi’s permissible levels of trade, distorting domestic support at the WTO. However, India has rejected the “flawed assumptions and erroneous methodologies” used by the US for its calculations.