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India and Public Stockholding at the WTO



  Apr 25, 2024

India and Public Stockholding at the WTO



1. What is public stockholding and why is it important for India?
Public stockholding refers to the practice of governments purchasing, storing, and managing food stocks to achieve food security objectives, support farmers, and stabilize market prices. For India, public stockholding is crucial for the success of programs like the Minimum Support Price (MSP), which ensures farmers receive a predetermined price for their crops, thereby protecting them from market fluctuations.

2. What is the current status of negotiations on public stockholding at the WTO?
Negotiations have been ongoing since the 2013 Bali Ministerial Decision, which introduced an interim solution known as the "peace clause." However, a permanent solution has been elusive, with recent discussions at the WTO Ministerial Conference in Abu Dhabi failing to yield results. India, along with other developing countries, continues to advocate for a definitive resolution.

3. What is the "peace clause" and how does it relate to India?
The peace clause allows India and other developing countries to exceed the WTO-prescribed agriculture subsidy cap of 10% of the value of production without facing legal challenges from other member countries. This clause is temporary and was implemented as an interim measure while a permanent solution is sought. India has invoked this clause multiple times, most recently for exceeding subsidy limits on rice in the 2022-23 period.

4. Why is a permanent solution on public stockholding important for developing countries?
A permanent solution would provide legal certainty and stability, allowing developing countries to plan and implement their food security programs without the fear of international disputes. It would remove the onerous conditions and notification requirements associated with the peace clause, making it easier for these countries to support their agricultural sectors and ensure food security for their populations.

5. What challenges are hindering the progress towards a permanent solution at the WTO?
Key challenges include opposition from some developed countries, such as the U.S. and Brazil, who are concerned about the potential impact of high subsidy levels on global agricultural markets. Additionally, linking the issue of public stockholding to broader negotiations on domestic support complicates the discussions, as it involves balancing a wide range of interests and priorities across different countries.

6. What are India's next steps in pursuing a permanent solution?
India is advocating for the WTO members to urgently revisit and consider a joint proposal by the G33-African Group-ACP Group, which outlines a potential permanent solution. India emphasizes the importance of concluding negotiations on public stockholding independently of other issues related to domestic support, to ensure focused discussions and progress.

These FAQs highlight the critical aspects of India's efforts at the WTO to secure a permanent solution for public stockholding, reflecting the broader struggle of developing countries to balance agricultural development, food security, and international trade commitments.


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