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India, developing nations continue to push WTO for permanent solution on MSP, public stock holding

Amiti Sen New Delhi | Updated on October 19, 2021

G33 group, African group, China, too, press for solution without onerous notification requirements

India, the African group, China and the G33 group of developing nations have stepped up pressure at the WTO for a permanent solution on public stock holding programmes, including crop support prices, prior to the crucial 12th WTO Ministerial Conference scheduled next month, and have insisted that the solution should cover all products without the need for onerous paperwork.

The countries have also indicated their willingness to meet mid-way those who have concerns on the matter and take measures to ensure that there are no trade distortions, a Geneva-based official told BusinessLine.

At a recent meeting of the WTO Committee on Agriculture, many members including the UK and Canada said that more information was needed to assess the needs for public stock holding. “To this, India retorted that there was no need to search for evidence that people in developing countries are suffering from food shortages in the pandemic,” the official said.

The Chair of the WTO committee noted that a third approach put forward by some members suggesting a work programme in order to set out key parameters and the principles, including product coverage, safeguards, the legal form and transparency, could be followed.

The WTO includes the subsidy provided for public stock holding, including MSP (minimum support price) programmes for crops, in the category of trade distorting support, which has to be maintained within a fixed ceiling of 10 per cent of the value of production. India and the G-33 have been fighting for the flexibility to give higher MSP.

‘Need permanent solution’

Although an interim “peace clause” was devised in 2013 to protect developing nations from being legally challenged for breach of subsidy levels, it is hard to use as it is subject to numerous notification requirements. India and the others are demanding that a permanent solution, that would cover all farm products and not involve numerous notifications, should be delivered at the WTO MC12 in Geneva starting on November 30.

Non-proponents, mostly Cairns Group members such as Australia, said they were concerned over possible trade-distorting effects and members losing rights to dispute settlement, the official said.

“India and the other supporters said they were willing to meet the countries that were not in favour of a permanent solution mid-way and address their concerns,” the official added.

In a recent paper submitted to the WTO, the G-33, including India and China, have already stated that the procurements made under MSP will not be exported. Hence the concern that subsidised exports could distort the global market could be put to rest.

With proponents and non-proponents remaining unmoving on public stock holding, an official said, “The Chair suggested that both sides should have a series of meetings to try and bridge the existing differences in position so that a common landing zone can be arrived at during the MC12.”

Published on October 19, 2021

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