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LATEST NEWS UPDATES | Ploughing a lonely furrow -Devinder Sharma

Ploughing a lonely furrow -Devinder Sharma

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published Published on Nov 25, 2017   modified Modified on Nov 25, 2017
-DNA

India is expected to bear the brunt of $160 billion trade-distorting farm subsidies provided by developed nations like the US

At a time when angry farmer protests seeking an increase in the Minimum Support Price (MSP) for all crops is on an upswing, India faces an uphill task to protect its food procurement operations at the forthcoming Buenos Aires Ministerial of the World Trade Organisation (WTO) from December 10-13. At stake is the very mechanism of providing MSP to farmers.

The United States (US), European Union (EU), Australia, Japan and Pakistan are among the countries insisting on finding a permanent solution for public stockholding programmes in developing countries. At the Ninth WTO Ministerial held at Bali, in December 2013, India had managed to safeguard its MSP provisions under a temporary ‘peace clause’ provisions until a permanent solution is arrived at, by December 2017. The temporary reprieve that India got is now expiring. The interim ‘peace clause’ has enabled India to continue with its food procurement operations, wherein food crops like wheat and rice are procured from small and marginal farmers at an MSP so as to meet the food security needs of a significantly large food-insecure population. Under the ‘peace clause’, no country could initiate any action against India at the WTO for its food procurement operation even if it breached the subsidy ceiling of 10 per cent.

Developing countries were allowed a de-minimis ceiling of 10 per cent of agricultural subsidies under the Aggregate Measure of Support (AMS) provisions. According to the US, EU and some other countries, India had already breached the AMS limits on paddy, for instance, exceeding the upper limit by 24 per cent.

India has firmly conveyed its unwillingness to offer any further concessions for market access to protect its available policy space to purchase grain at MSP from farmers. On the other hand, the US, EU, Brazil, Uruguay and Pakistan have already made it clear that they would not accept any permanent solution on public stock holding unless it contains strong safeguards and incorporates transparency provisions. They are particularly keen that India is not allowed to export from the procured stocks as it distorts the international grain trade.

In addition, the developed countries desire India, and other developing countries, to provide more market access as well as to bring in transparency commitments which include an undertaking that it will refrain from including more crops in its procurement operations. Seeking an approval before adding any more crops to the public stockholding operations or enhancing the MSP, is also sought for.

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DNA, 24 November, 2017, http://www.dnaindia.com/analysis/column-ploughing-a-lonely-furrow-2562113


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