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India’s use of WTO peace clause to support rice farmers questioned

A number of countries have questioned India for invoking the World Trade Organization (WTO) peace clause for surpassing the ceiling on support it can offer its paddy farmers. These are US, EU, Canada, Brazil, Japan and Paraguay. The provision has been designed to protect a developing country’s food procurement programmes against action from WTO members in case subsidy ceilings are breached. The limit fixed is at 10% of the value of food production (called de minimis) in the case of India and other developing countries.

India is the first country in the world to have invoked the peace clause. It informed the WTO in April that the value of its rice production was US$ 43.67 billion in 2018-19; while it gave subsidies worth US$ 5 billion. The country also stated that the 850,000 tonnes of rice stocks subsequently sold in the domestic market were not allowed for export. This was done with the intention of preventing the risk of distorting global markets.

The EU quizzed India regarding the products encompassed by the public stockholding programme to assure that only rice support exceeded the limits. Information on support for rice in previous regular notifications was also sought.

 

 

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