India demands permissible food subsidy outside the deminimus

Seeking a permanent solution to the food subsidy issue, Commerce Minister Suresh Prabu demanded granting of food subsidy outside the 10% deminimus allocated for developing countries. In his speech at the Plenary session of the 11th WTO Ministerial Conference at Buenos Aires, the Minister pointed out that millions of impoverished Indian people depend on subsidy.

The MC is expected to come out with a final settlement of the food subsidy issue. India demand WTO to give a permanent solution to the public stockholding of food grains issue in this MC. At present, a peace clause is granted to India that allows the country to proceed with the MSP subsidy till the current MC.

A viable solution is put forward by India and members of the G33 group. According to this formula, the WTO should give flexibilities to members to give subsidy for poverty reduction related procurement. This flexibility should be added to the 10% deminimus clause; implying that the subsidy can be in addition to the deminimus.

At the same time, the Agricultural Committee is under pressure from food grain exporting countries not to give a permanent status to food security subsidy. The exporting countries are supportive of the continuation of the present peace clause granted to India but not ready for more flexibilities. 

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