In order to find solution to the issue of food stockpiling, the Commerce Minister Nirmala Sitharaman has urged the World Trade Organisation (WTO) chief to vigorously follow the efforts of the member countries to reach finality on public stockholding (PSH) and the agricultural Special Safeguard Mechanism (SSM). She also stressed that the Eleventh Ministerial Conference (MC11) of the WTO outcomes must include a permanent solution on PSH for food security purposes on which there is a ministerial mandate.
The minister highlighted that any attempts at seeking outcomes on new issues such as e-commerce and investment facilitation should not be at the cost of other long pending issues on the agenda of the Doha Round. The new issues which are being pushed by developed world include investments, competition, labour, government procurement, environment and global value chains. A permanent solution to the issue of food stockpiling is important for smooth implementation of India's food security programme.
As per the global trade norms, a WTO member country’s food subsidy cap should not breach the limit of 10%, which is based on the reference price of 1986-88. There are apprehensions that full implementation of food security programme may breach this cap. So India wants amendments in the formula to calculate the food subsidy cap. Currently, there is a peace clause according to which no country can ask WTO to take action against a country that breaches the 10% cap. This clause is there till a permanent solution is found for the food stockpiling issue. This has enabled India to continue procurement and stocking of foodgrain for distribution to poor under its food security programme without attracting any kind of action from WTO members even if it breaches the 10% subsidy cap as prescribed by the multilateral trade body.
SSM is a toll demanded by developing countries, including India, to support poor farmers from sudden surge in imports. Several developed countries give massive subsidies to their farmers and in such a case SSM would help India in protecting the farmers. High subsidies distort prices and makes Indian farmers vulnerable when the products hit the domestic markets.
