Public Stockholdings Issue in the WTO- the Way Forward for India

Abstract

This policy paper takes stock of the current status of negotiations on the issue of public stockholding for food security on which the WTO Members are committed to agree on a permanent solution by the 11th Session of the Ministerial Conference of the WTO scheduled for December 2017 at Buenos Aires. It examines the origins of the problem and critically reviews the proposals that have been put forward to resolve it. It takes the view that the proposals made by the G33 to secure extra flexibility for providing market price support have little chance of being accepted at a time when the general sentiment worldwide is to obtain reduction in trade-distorting market price support. It recommends that India submit proposals based on economic logic and reasoning. First, non-subsidising Members must be allowed to neutralise inflation fully in fixing the support price from year to year. Second, an administered price that is equal to or below the average international prices must be recognised as non-distorting and deemed to be consistent with the requirements of the WTO Agreement. It also argues that it is not necessary for India to push hard on the issue in the light of the guarantee given to developing country Members against disputes being raised against them in the WTO. India should submit these proposals and wait for their compelling logic to be recognised in due course.