India stands firm at WTO: Our food subsidies ensure global food security

Even as some developed nations raised questions that India’s “highly subsidised” public stock holding (PSH) programme is affecting food security of other countries, India stood firm in its position at a World Trade Organization (WTO) meeting stating that it is the other way around.

The development comes in the backdrop of some WTO member-nations, mainly by Australia, Canada, and the US, raising questions over India’s minimum support price (MSP) programme for food grains, particularly rice, since the subsidy has breached the suggested limit thrice.

In a recent meeting of the WTO’s committee on agriculture in Geneva, India defended its position stating that India’s requirement for rice is much more than the overall global export of the food grain. “Had we not been maintaining adequate stocks (during the time of crisis), we would have been dependent on the rest of the world. The global exports of rice were 56 million tonnes (mt) in 2021. India distributed 58 mt rice to its 800 million beneficiaries. If we required 58 mn of rice from other nations, then prices of rice in the global markets would have skyrocketed,” a person aware of the discussions said. That would then have adversely impacted the food security of the less developed nations, the person added. 

“We have ensured the food security of other countries by ensuring our own food security,” the person cited above said. Under the trade norms, a WTO member’s food subsidy bill should not breach the limit of 10 per cent of the value of production. India has invoked the ‘peace clause’ under WTO norms to protect its food procurement programme against any action from member-nations in case the limit is breached. 

Even though countries cannot take India to any dispute, they can have consultations with developing countries and pose them with queries regarding breaching the limits. India, on its part, notifies its domestic support to the WTO. 

In the committee’s previous meeting on agriculture during the last week of March, India countered the questions raised and made a presentation on India’s food security programme. India also clarified that food grains procured under MSP are not exported. 

“Some countries have been trying to create an impression that India exports from surplus, which is incorrect. When we have surplus stock, we have an open market sale scheme (D) scheme for domestic use (rather than exporting it). We have a proper system in place and checks and balances,” the person said.

India doesn’t export common paddy, but on premium quality of rice, such as basmati and some other varieties that are in demand world over. On the other hand, only common paddy is procured under MSP.