Amid the ongoing World Trade Organisation's 13th Ministerial Conference (MC13), Finance Minister Nirmala Sitharaman said that India's stand on providing subsidies to farmers remains unchanged despite pushback from certain WTO members.
"Our position in the WTO since the time I was the Commerce Minister is the same. We cannot have a few countries having gone through the Minimum Support Price (MSP) route and continue to do so, they may not call it MSP, but they support their farmers. But only when India and many other nations like India wanted to procure grains from farmers at MSP and keep it as buffer stock, use it for PDS, there is a problem," Sitharaman said during her address at Jawaharlal Nehru University's New Delhi campus on March 1.
Some WTO members have raised concerns over the country's MSP scheme on key agricultural products, as well as the recent export restrictions on commodities such as rice, citing that it distorts market prices.
India, in its response, has maintained that they have to protect the interest of the poor and vulnerable farmers, besides taking care of its domestic food security needs.
"WTO has a problem if India keeps the stock of grain to ensure we can release it when prices in the market shoot up, WTO does not approve of such interventions. India has been explaining to WTO this is important for farmers as much as consumers. End of the day it is also important because in a country like India people who are not covered under Public Distribution System (PDS) should also have access to affordable grains. So, this fight continues," Sitharaman added.
The PDS evolved as a system of management of scarcity through distribution of food grains at affordable prices. The Centre, through Food Corporation of India (FCI), has assumed the responsibility for procurement, storage, transportation and bulk allocation of food grains to the states.
Under the PDS, presently, commodities including wheat, rice, sugar and kerosene are allocated to the states and union territories for distribution.
India has been pushing for a permanent solution on the issue of public stockholding for food security at WTO ministerial conferences.
Even at MC13, New Delhi is seeking a permanent solution on public stockholding with more enhanced terms, compared to the 2013 Bali peace clause. The public stockholding programme is a policy tool used by the government to meet food security and safeguard millions of its hunger-stricken population.
"As per the peace clause we can continue to grant MSP till such a time a permanent solution is arrived at on this mechanism for any country, inclusive of India. So, with the permanent solution not being found till date, the peace clause will exist in perpetuity," Sitharaman said.
The finance minister is referring to a “due restraint” or “peace clause” contained in WTO's Agreement on Agriculture. This clause is an interim arrangement giving flexibility to countries like India to procure grains from farmers at MSP and build a stockpile to give subsidised or free rations to the poor.
The Indian government that provides free food grains to around 81 crore poor people, is demanding a permanent solution to this interim arrangement at the WTO.
The WTO's MC13 in Abu Dhabi, United Arab Emirates (UAE), which began on February 26, is scheduled to end on March 1, following a one-day extension on proceedings.
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