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Mahesh

02/08/22 22:56 PM IST

India’s ‘wheat waiver’ WTO demand is risk-fraught

In News 
  • Recently, India demanded World Trade Organization (WTO)  find a permanent solution to the issue of public stockholding (PSH) of food.
India's MSP Policy 
  • India’s MSP policy for procurement of produce (for supporting farmers’ income as well as providing subsidized food for the poor) had fallen out of WTO rules. Under WTO law, such price support-based procurement from farmers is considered a trade-distorting subsidy.
  • Currently, India has temporary relief due to a ‘peace clause’ that bars countries from raising legal challenges against these subsidies.
  • WTO’s peace clause (inserted in Bali Ministerial, 2013)protects India’s food procurement programmes against action from WTO members in case the subsidy ceilings are breached.
Export of public stock holding food grains:

  • WTO law also prohibits countries from exporting foodgrain procured at subsidised prices. However, the recent food crisis due to Russia-Ukrain War has led to India insisting that it should also be allowed to export food, especially wheat, from the pool of foodgrain procured under the MSP.
Permanent solution for PSH:
  • India demands a permanent solution to the PSH policy. However, no mention of such a solution was made in the recently concluded Geneva declaration (2022).
Source- The Hindu 

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