The WTO Issue of Public Stockholding(PSH)of Food grains

The WTO Issue of Public Stockholding(PSH)of Food grains

Tags:      Gig Economy     Economy     WTO     WTO Public Stockholding     MSP     Economic Growth     Masala Bond     Environmental Performance Index     Forecast of Economic Growth     Functions of the Finance Commission

Hello UPSC aspirants! The issue of PSH of food grains has again been postponed until the next ministerial conference of WTO. This does not augur well for countries like India which face a severe food crisis. India is home to the largest number of hungry people in the world. India’s level of hungriness falls under the category of serious (20 to 34.9) if we consider the GHI value of 27.5 ( out of 100 ) for the year 2021. According to the data of the National Family Health Survey-5 ( 2019-21 ), 35.5 percent of children ( under 5 ) are stunted while 19.3 percent of children of the same category are wasted. This condition is going to further deteriorate in the present scenario of runaway inflation. In the light of these facts, the postponement of the issue of the PSH of food grains until the next Ministerial Conference is a kind of blow for India and other similar countries. The developed countries have been following the Tarikh pe Tarikh approach right since the Bali Ministerial Conference of 2013, that is, MC-9.

Dear students, how can we better understand this issue of the PSH of food grains whose permanent solution has become elusive. According to WTO, the PSH programs are the programs used by various national governments to maintain food security by procuring, storing, and distributing food grains. For the success of these programs, direct ( in the form of higher minimum support prices or MSPs ) and indirect farm subsidies ( in the form of fertilizer subsidies, etc. ) are provided to ensure enough production of food grains. Since higher domestic production implies fewer imports, it is prone to become trade-distortionary. This ground is often used by developed countries when they criticize India’s PSH programs, particularly after the implementation of the National Food Security Act, 2013.

Dear friends, this issue of the PSH was extensively taken up at the Bali Ministerial Conference held in 2013. The AOA ( Agreement on Agriculture ) prescribes the upper limit of 10 percent ( of agricultural output ) on direct and indirect farm subsidies. India considered this limit as a restrictive factor in the actual implementation of the National Food Security Act( NFSA ),2013. As you know, the NFSA provides a legal guarantee to beneficiary families (67% of the population) for quite cheaper food grains. This requires higher production of food grains which isn’t possible without the higher level of direct and indirect farm subsidies. After intense discussion, India was temporarily allowed to cross the limit of 10 percent under the provision of the PEACE CLAUSE, also known as the DUE RESTRAINT with the promise that a permanent solution to the problem of food security would be achieved by MC-11.

It is to be noted that no permanent solution was achieved in the MC-11 which was held in Buenos Aires, Argentina in 2017. The USA denied participating in the discussion on the topic of the PSH of food grain. This shows the double standards of the developed countries. They are not interested in getting a permanent solution to this problem of food security in the developing countries like India.