Five WTO countries claim India provides excessive market support to wheat and rice – Times of India

Five WTO members – Argentina, Australia, Canada, Ukraine and the US – have alleged that India provides excessive market support to wheat and rice, distorting global trade. In a World Trade Organization (WTO) notice, these countries claimed that India’s apparent MPS (market price support) for rice appears to have been more than 87 percent of the Value of Production (VoP) for rice in each of the two years under review (2021-2023) for which India has submitted data to the multilateral body.
“India appears to provide significant market price support, both in terms of absolute value and as a percentage of production value, for rice and wheat,” said the communication from these countries submitted to the WTO Committee on Agriculture.
An Indian official said the country will respond appropriately at a formal forum.
The notice said India’s latest domestic aid notification involved more than $60.5 billion in “trade distorting” domestic aid under a line of the Agreement on Agriculture (AoA).
It said the co-sponsors of this document “look forward to future discussions on the significance of India’s MPS for rice and wheat for both the Indian and global markets – both with India and other members”.
In April, India invoked the World Trade Organization’s peace clause to provide excessive support to rice farmers in the 2022-2023 marketing year, to support existing public stockpile programs for food security purposes.
Under the peace clause, WTO members refrain from challenging any breach of a developing country’s regulatory subsidy ceiling in the Geneva-based organization’s dispute settlement forum.
Subsidies above the prescribed ceiling are seen as trade distorting.
The limit is set at 10 percent of the value of food production for developing countries like India.
New Delhi has stated that the country has complied and continues to comply with the domestic support notification requirements under the AoA.
India has told the WTO that while the value of India’s total rice production in 2022-23 was $52.8 billion, a subsidy worth $6.39 billion was given to farmers during the marketing year.
The country has time and again called on WTO members to find a permanent solution to the long-pending public food supply problem, saying this is directly linked to achieving the Sustainable Development Goal of zero hunger by 2030 .
The public stockholding (PSH) program is a policy instrument through which the government purchases crops such as rice and wheat from farmers at the minimum support price (MSP) and stores and distributes food grains to the poor.
According to global trade standards, a WTO member state’s food subsidy law should not exceed the limit of 10 percent of the value of production based on the 1986-1988 reference price.
India has sought changes in the formula for calculating the food subsidy ceiling.
As an interim measure, WTO members had agreed at the ministerial meeting in Bali in December 2013 to introduce a mechanism popularly called the peace clause and committed to negotiating an agreement for a permanent solution.
Under the peace clause, WTO members agreed not to challenge any violation of the prescribed ceiling by a developing country before the WTO dispute settlement forum.
This clause will remain in force until a permanent solution to the food supply problem is found.