India has stoutly defended its minimum support price (MSP) scheme for foodgrain at the World Trade Organization arguing that its public stock holding programme (PSH) not only supported small and marginal farmers and fed the poor but also kept global prices in check ensuring food security for LDCs and vulnerable countries, an official said.

In a presentation on its PSH experience at a seminar at the WTO Agriculture Committee meeting on March 27-28, India’s representative explained how the programme was helping to keep global prices in check and had nothing to do with subsidised exports, the official tracking the matter told businessline.

“Some members keep attacking our MSP programme and say that our PSH subsidies affect food security of other countries. We said in our presentation that it is the other way round.

“Since we were maintaining these stocks, when the crisis (pandemic) came, we could feed (provide free foodgrains) to our 800 million plus vulnerable population. Had we not been maintaining our stock, we would have been dependent upon rest of the world,” the official said.

The Bali ‘peace clause’

Members are specifically attacking rice subsidies as India was the first country to use the Bali ‘peace clause’, which allows developing countries to breach the subsidy ceiling of 10 per cent for agriculture produce without being dragged to dispute by members, for rice. 

“If you look at rice, the global export supplies in 2020-21 were 56 million tonnes, while we distributed 58 mt to 800 million people through PSH. So, India’s public distribution was more than global supplies. Had we required that 58 mt from outside, the prices of rice in global market would have skyrocketed. Everybody would have hiked their prices. Then food security of LDCs and vulnerable would have been actually hit,” the official said, adding that some rice exporting countries were disappointed that prices did not spike during the crisis.

New Delhi also struck off demands made by some countries seeking procurement data and information for all food crops that were under MSP. “India will certainly not share information on any crop other than rice where the actual subsidy cap breach has happened. The Bali agreement only seeks information for the item for which the peace clause has been invoked,” the official said.

The peace clause, which is saddled with a lot of tough notification requirements and conditions such as not affecting food security of other members, was invoked by India for rice support provided in 2018-19 and 2019-20.

Nine countries, including the US, Australia, Canada, Thailand, Brazil, Japan, New Zealand, Paraguay and Uruguay, sought consultations with India over the use of the peace clause and have been seeking a lot of information. 

While some, including the US, have been accusing India of habitually not including the full required information in its notifications, some members have indicated that the country did not have an adequate monitoring mechanism to ensure no stocks were exported.

“There were certain areas, where India has said it will provide information at a later date as it was not available. We cannot cook it for them. We are anyway notifying what is required as per the notification requirement of the AoA (Agreement on Agriculture). If they are not satisfied, we can’t help it,” the official said.

Concerns around exports

On concerns around exports of subsidised rice, the official said India procured common paddy under PSH while it exported premium rice. 

The nine countries will continue holding consultations with India on its PSH programme as they were entitled to under the peace clause.