Even as India becomes the central figure in a debate at the World Trade Organisation (WTO) on a proposed plan to curb restrictions on food exports, the country will not yield to force, senior officials said. India is not willing to accept the plan when its right to stockpile foodgrains is still not accepted, and will not vote for it, they told Moneycontrol.
The once-in-two-years mega meeting of trade ministers of all 164 WTO member nations, which legislates on global trade, is taking place in Geneva, Switzerland.
In the aftermath of a global shortage of wheat due to the Russian invasion of Ukraine, both major growers of the cereal, and unseasonal hot weather destroying crops, food security has become the central topic of discussion at the 12th Ministerial Conference of the WTO.
On the third day of the summit, a proposed global declaration to not curb foodgrain exports to the World Food Programme (WFP), which seeks to fight hunger in places hit by conflicts, disasters and climate change, is one of the main items on the agenda. The declaration will be binding and goes against the demands of India to exercise its right to control its food exports.
Officials also point out that this draft declaration does not mention public stockholding for food security purposes. “While many countries are concerned over a looming food crisis, India’s responsibility to provide food to its 800 million poor and vulnerable population will not be compromised upon,” a senior trade negotiator for India told Moneycontrol.
India’s stance on the issue is being closely watched by almost all major economies as every decision at the WTO is taken unanimously and even a single dissenting voice can shut down the entire process.
As of now, it seems India’s refusal may tank the proposal, backed by the overwhelming majority of WTO member nations.
Decades-old battle
India and other developing nations run major public stockholding programmes to purchase, stockpile and distribute foodgrains to people in need. Richer economies say some stockholding programmes are deemed to distort trade when they involve purchases from farmers at prices fixed by the governments such as India’s minimum support price programme.
The WTO has a "peace clause" that permits uninterrupted implementation of India’s food security programme till a permanent solution is found. This allows the country to procure and stock foodgrains for distribution to the poor without being penalised by the trade body even if it breaches the 10 percent subsidy cap prescribed by it.
For a permanent solution, India had earlier proposed either amending the formula to calculate the food subsidy cap of 10 percent, which is based on the reference price of 1986-88, or allowing such schemes outside the purview of the subsidy cap.
Government speak
There were huge concerns about food security during the COVID-19 pandemic. Commerce and industry minister Piyush Goyal on June 13 told the WTO that India can’t forgo the public distribution system (PDS) for foodgrains that it has built over the past 75 years.
India distributed nearly 100 million tonnes of foodgrains through the PDS, thanks to the public stocks that it had acquired. It had allocated grains to nearly 800 million poor and vulnerable people for nearly the past 25 months at a cost of over $50 billion. This almost doubled the existing foodgrains being distributed to vulnerable sections of society under the National Food Security programme.
“This has been universally recognised as one of the most comprehensive approaches to addressing hunger during the pandemic. In fact, several reports internationally suggest that this has helped bring down inequality amongst different sections of society,” Goyal said.
Pressure on India
India had proceeded to the summit with the support of poor and developing nations but as the risk of a food crisis has become more evident, it has lost allies. The proposal is being backed by a group of 70-80 countries led by Singapore.
On June 13, a WTO spokesperson told a news conference in Geneva that most WTO members expressed broad support for the proposal, with the exception of India, Egypt and Sri Lanka. Previously hesitant Tanzania had decided to endorse the texts, the spokesperson added.
Egypt and Sri Lanka, both net food importers, want recognition that their ability to export food might be limited.
