India calls for finding permanent solution to food stockholding at 2024 WTO meet
Recently, India has sought a permanent solution to food stock holding in the meeting of the World Trade Organization (WTO) Committee on Agriculture.
- At the meeting of the WTO Committee on Agriculture, India has demanded a permanent solution on food security or a point-by-point discussion on limits on public stock holding and MSP.
- India has informed the WTO that its rice production in 2019-20 was valued at $46.07 billion, while it subsidized $6.31 billion, or about 13.7 percent, as against the permitted 10 percent.
- On this, countries like America, Britain, Japan and the European Union have tried to cancel the Bali interim decision. India was the first country to use the Bali ‘Peace Clause’.
- Under this, no country will be legally prohibited from operating food security programs even if the subsidy violates the limits specified in the Agreement on Agriculture (AoA) of the WTO. This limit is equal to 10 per cent of the value of production.
- Subsidies in excess of prescribed limits are seen as trade distortions.
3 Pillars of AoA –
- Under the terms of market access, both developed and developing countries were required to convert all non-tariff barriers into tariff barriers.
- Domestic subsidies are classified into different colored ‘boxes’. This classification is based on the effect of subsidy on production and trade.
- Export subsidies and other methods are used to make exports artificially competitive.
- As a temporary solution under the Peace Clause (2013), WTO members agreed in the Dispute Settlement Forum of the WTO that if a developing country violates a prescribed ceiling subsidy, the member country would not object to it.
- Green Box: Subsidies that do not distort trade, or cause minimal distortions. There is no cap on this subsidy.
- Amber Box: This is the widest range of subsidies. It is limited to 5% (10% for developing countries) of agricultural production.
- Blue Box: Wider range of subsidies are allowed, but should be designed to create fewer trade distortions. There is no limit on subsidy.
Source – The Hindu
