India has launched a staunch defence of its recent move to ban the export of wheat and broken rice at the World Trade Organization (WTO), after a number of economies, including the US and the EU, questioned its move in recent weeks.
New Delhi has said that these are only “temporary” moves and have been initiated due to domestic food security imperatives.
Commenting on its May 13 move to prohibit wheat exports, New Delhi has conveyed to WTO members that it has catered for the genuine need of neighbouring countries and food-deficit nations through government-to-government deals, official sources said. Also, it honoured supply commitments that were made before the ban was imposed.
As for the latest move to ban the outbound shipments of broken rice, New Delhi has said it’s primarily used in poultry feed, and a spurt in the grain’s exports pressured prices in its domestic market. Given a drop in acreage under the paddy crop, the government had to announce this move, along with a 20% export duty on non-Basmati rice (barring parboiled rice).
“As and when the situation improves, export restrictions can be lifted,” said an official.
In a meeting in Geneva last week, countries, including the US, Australia, Brazil, Canada, New Zealand and Japan also sought consultations with India on its use of the so-called “peace clause” to protect its food programmes against action from trade disputes.
Earlier this year, India invoked the peace clause, for the third time, for exceeding the cap on support it offers to paddy farmers. Under the WTO rules, developing nations can’t extend farm/food subsidy beyond 10% of the production value of a commodity. However, this is calculated on the basis of over three-decade-old external reference prices that are clearly outdated. Consequently, it severely impairs developing countries’ ability to offer any meaningful support to their farmers, while their developed counterparts continue to extend massive farm subsidies under a different formula meant for them.
As part of a permanent solution at the WTO, the developing countries, including India, have been seeking protection against disputes on any food procurement or other support programmes that have been launched after 2013 (when the peace clause for immunity was granted to them for existing programmes) and those that are going to be rolled out in future.