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Resource centre on India's rural distress
 
 

India’s ‘wheat waiver’ WTO demand is risk-fraught -Prabhash Ranjan

-The Hindu

Such a stand will dilute its core agenda of pushing for a permanent solution to public stockholding for food security

One of the cardinal demands of India in the World Trade Organization (WTO) — and rightly so — has been to find a permanent solution to the issue of public stockholding (PSH) of food to protect India’s food security (PSH policy). India’s PSH policy is based on procuring food from farmers at an administered price (minimum support price or MSP), which is generally higher than the market price. The PSH policy serves the twin objectives of offering remunerative prices to farmers and providing subsidised food to the underprivileged.

However, under WTO law, such price support-based procurement from farmers is counted as a trade-distorting subsidy, and if given beyond the permissible limit, breaches WTO law. Currently, India has temporary relief due to a ‘peace clause’ which bars countries from bringing legal challenges against price support-based procurement for food security purposes. However, a permanent solution to this issue is still not in the offing.

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