One of the cardinal demands of India in the World Trade Organization (WTO) — and rightly so — has been to find a permanent solution to the issue of public stockholding (PSH) of food to protect India’s food security (PSH policy). India’s PSH policy is based on procuring food from farmers at an administered price (minimum support price or MSP), which is generally higher than the market price. The PSH policy serves the twin objectives of offering remunerative prices to farmers and providing subsidised food to the underprivileged.
However, under WTO law, such price support-based procurement from farmers is counted as a trade-distorting subsidy, and if given beyond the permissible limit, breaches WTO law. Currently, India has temporary relief due to a ‘peace clause’ which bars countries from bringing legal challenges against price support-based procurement for food security purposes. However, a permanent solution to this issue is still not in the offing.
The WTO ministerial meeting in June at Geneva did precious little to address this issue. Paragraph 10 of the declaration on food security adopted at the Geneva ministerial states: “We recognize that adequate food stocks can contribute to the realization of Members’ domestic food security objectives and encourage Members with available surplus stocks to release them on international markets consistently with WTO rules”.
