Allow India to export foodgrains from public stock to needy nations, says FM Sitharaman to WTO

India urged the World Trade Organization (WTO) to relax rules to allow the country to export foodgrains from its public stocks to nations facing food crises.

"WTO restriction that grains so procured cannot be brought to the market to export - it is a condition which exists from the Uruguay Round days," finance minister Nirmala Sitharaman said on Friday. "We have repeatedly said that (surplus) than what we have for our small farmers... we are quite willing to trade," she said at a seminar on Strengthening Global Collaboration for Tackling Food Insecurity in Bali, Indonesia ahead of the third meeting of G20 finance ministers and central bank governors.

Questions Raised over MSP Scheme

WTO norms do not allow countries to export foodgrains from their public stocks procured at subsidised rates. India can help reduce hunger or food insecurity but there is hesitation on the part of the WTO. This at a time when the Russia-Ukraine conflict and climate change have created food shortages in many countries.

India has exported 1.8 million tonnes of wheat since May 13, when an export ban was imposed, to meet previously agreed commitments.

Many developed countries have alleged India has been providing minimum support prices to its farmers in violation of WTO rules.

In 2018, the US questioned the legality of India's minimum support price for rice, wheat, and cotton. Other countries such as Australia also raised questions regarding the Fair and Remunerative Price and the State Advised Price (SAP) granted to sugarcane farmers.

A group of about 70-80 countries led by Singapore is pushing WTO member countries to accept binding commitments to not extend export restrictions on foodgrains procured under the United Nations World Food Programme (WFP).

Some members have, however, voiced concerns over blanket exemptions for WFP food purchases due to domestic food security considerations.

Sitharaman said food, fuel, and fertilisers are global public goods and ensuring access to these for developing and emerging economies is critical. She said there is an urgency to strengthen food production and the global food system.

Sitharaman also shared India's experience, including robust gains in agriculture production, citizen-centric food security programmes, and innovative delivery mechanisms such as the One Nation One Ration Card scheme. "There are ever so many such schemes through which we have ensured that the farmers in India, however difficult the environment may be, produced and their cost is met even if the market vagaries hit them negatively," Sitharaman said.

Capital expenditure
Sitharaman said India's long-term growth prospects were embedded in public capital expenditure programmes and evidence-based policymaking is vital for resilient economic systems.

The budget presented in February raised capital expenditure by 35.4% for the current financial year to Rs 7.5 lakh crore to push a public investment-led economic recovery. The capital spending in FY22 was over Rs 6 lakh crore.

The finance minister also said that sustainable global recovery should pivot on climate actions and the focus needs to be on scaling up climate finance and propelling green transitions.

Participating in the second session of the G20 meet, Sitharaman shared views on the group's health agenda, including pandemic preparedness and response mechanisms.

She also highlighted the need for immediate mobilisation and deployment of resources for health emergencies.