Government Hopeful Of Solution To Food Subsidy Issue At WTO

Justifying India's tough stand, which had led to collapse of the WTO Geneva talks on July 31, Sitharaman said that without a permanent solution, public stock holding programmes in India and other developing countries would be hampered by the present ceiling on domestic support which is pegged at 10 per cent of the value of production and is wrongly considered as trade-distorting subsidy to farmers under existing WTO rules.

India had decided not to ratify WTO's TFA, which is dear to the developed world, without any concrete movement in finding a permanent solution to its public food stock-holding issue for food security purposes.

India has asked the World Trade Organization (WTO) to amend the norms for calculating agriculture subsidies in order to procure food grains from farmers at minimum support price and sell that to poor at cheaper rates without attracting any penalty in the WTO.

The current WTO norms limit the value of food subsidies at 10 per cent of the total value of food grain production.

However, the support is calculated at the prices that are over two decades old.

The government is asking for a change in the base year (1986-88) for calculating the food subsidies.

There are apprehensions that once India completely implements its food security programme, it could breach the 10 per cent cap. Breach of the cap may lead to imposition of hefty penalties if a member country drags India to the WTO.

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