India’s minimum support price (MSP) programme for foodgrain is facing increased scrutiny at the WTO with a group of nine countries, including the US, Australia, Canada, Brazil and Thailand, shooting off a fresh letter asking New Delhi for joint consultation to examine if it is adhering to all conditions stipulated by the multilateral body.

The countries, at a recent meeting of the WTO, expressed concerns about India not providing full information in its notifications related to its public stockholding programmes and dodging questions. The group of nine also includes Japan, New Zealand, Paraguay and Uruguay.

‘Peace clause’

“New Delhi has maintained that it has been meeting all notification requirements and agreed to meet members bilaterally but it stressed that it will not be forced into a group meeting facing bombardment of all nine members,” the source tracking the matter told BusinessLine. The MSP programme for rice is especially under the spotlight as India is the first country to invoke the Bali `peace clause’ to justify exceeding the 10 per cent ceiling (of the total value of rice production) for rice support.

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While the `peace clause’ allows developing countries to breach the 10 per cent ceiling without invoking legal action by members, it is subject to onerous notification requirements and numerous conditions such as not distorting global trade and not affecting food security of other members. The conditions also specify that a developing member benefiting from the `peace clause’ shall upon request hold consultations with other members on the operation of its public stockholding programmes.

The US has been criticising India for habitually not including full information in its notifications, the source said. Paraguay had earlier observed that in its understanding, it was mandatory to report all public stockholding programmes and challenged India for lacking a monitoring mechanism to ensure no stocks are exported. 

Value of production

“In its defence, India had said it provided data on value of production (VoP) on several crops and pointed out that it was not mandatory to report the provisional VoP in notifications. It also said that as it did not breach limits for any other crop except rice, it did not have any obligation to notify on all other public stockholding programmes,” the source said.

It now has to be decided whether consultations between India and the nine countries will be held plurilaterally or in a bilateral format. “Since the Bali decision does not specify the consultation format, the countries will need to decide amongst themselves,” the source added.