Posted on March, 6, 2024 at 09:18 am
At the World Trade Organisation’s 13th ministerial conference in Abu Dhabi, Thailand replaced its ambassador, Pimchanok Vonkorpon Pitfield, after the Indian government lodged a protest against her remarks on its public stockholding programme. Pitfield had said that India’s rice procurement programme for PDS is not for the people, but for capturing the export market. Thailand is the second biggest rice exporter after India. It is also part of the Cairn Group — a group of 20 nations that includes rice exporters such as Thailand and Vietnam as well as countries like Australia, Brazil and Canada. The group, which pushes for liberalisation of global trade in agriculture, has raised questions in the past as well over India’s programme on grounds that it is “distorting” global food prices and “hurting” the food security of other countries. They are missing the point.
The Indian government procures foodgrains for meeting objectives such as its commitments under the National Food Security Act, and other schemes. It is directed towards ensuring food security for a large part of the country’s population, not for distorting global food trade. The requirement of rice and wheat under these welfare schemes is not more than 60 million tonnes. Even after making adjustments for an additional quantity for open market interventions, the total requirement is not significantly more. Procurement did rise during 2021-22 and 2022-23 in excess of the requirements for the public stockholding programme. But stocks declined as beneficiaries were given 5 kg of free grain per person per month in addition to their existing quota under the National Food Security Act during the Covid period and because of two poor wheat crops.
In turn, India has legitimate concerns over the manner in which subsidies are estimated at the WTO. The price level at which the calculation is carried out to determine if the product specific support exceeds the specified ceiling of 10 per cent of the total value of production is outdated. The calculation, carried out at 1986-88 prices, tends to overestimate the subsidy. As per the calculations, the value of India’s rice production was $46.07 billion, while the subsidies it gave were pegged at $6.31 billion. This works out to 13.7 per cent, higher then the prescribed ceiling. As reported in this paper, India and other developing countries are seeking a sustainable solution for the issue of public stockholding for foodgrains. Procurement of foodgrains at the minimum support price and distribution under the NFSA is a pact the Indian government has made with its farmers and citizens. Countries across the world have different ways of helping their farmers. In fact, other countries such as the US and the EU, are estimated to give far more subsidies to the farmer than India.
Source: The Indian Express