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At WTO, India seeks permanent solution for public stockholding

At WTO, India seeks permanent solution for public stockholding

  • India at the WTO wanted to work on the long-pending permanent solution for public stockholding subsidies, for smooth running of programmes such as the MSP.
  • The recent Ministerial Conference in Abu Dhabi failed to deliver results.

Key highlights

  • In Committee on Agriculture (CoA) meeting at the WTO, New Delhi insisted that members should revisit the joint proposal made by G33-African Group-ACP Group on public stockholding,
  • A permanent solution on public stockholding could not be agreed to at MC13.
  • The members should urgently honor the mandate on the matter pending since the 2013 Bali Ministerial Decision
  • The peace clause is ridden with difficult conditions and onerous notification requirements.

Peace Clause-

  • High subsidies are percieved to be distorting global trade.
  • The peace clause protects a developing country’s food procurement programmes against action from WTO members when subsidy ceilings are breached.
  • The limit is pegged at 10% of the value of food production (called de minimis) in the case of India and other developing countries.

WTO-Agriculture Agreement:

  • It calls for reduction in domestic subsidies that distorts free trade and fair price in the Agriculture Industry.
  • The Aggregate Measurement of Support (AMS) is to be reduced by 20% over a period of 6 years by developed countries and 13% over a period of 10 years by developing countries.

Subsidies are categorized into:

  • Green Box: subsidies that do not distort trade, or at most cause minimal distortion.
  • They are government-funded and must not involve price support.
  • They also include environmental protection and regional development programmes.
  • Green box subsidies are therefore allowed without limits.

Amber Box:

  • All domestic support measures considered to distort production and trade fall into the amber box, Example MSP in India is categorized under Amber box.

Blue Box:

  • This is the “amber box with conditions”. Such conditions are designed to reduce distortion, by limiting production and having designated quotas.
  • At present, there are no limits on spending on blue box subsidies.

Prelims Takeaway:

  • WTO
  • Agreement on Agriculture

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