• UGI USER
  • Mar 05, 2024
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POINT OF THE SUBSIDY:

Why in the news?

India’s foodgrain procurement aims at domestic food security, not global trade distortion, amid concerns raised at WTO.

source:medium

Highlighting the Objectives of Foodgrain Procurement:

  • India procures food grains to meet obligations under the National Food Security Act and other welfare schemes.
  • The main objective is to guarantee food security for a significant portion of the population, not to disrupt global food trade.
  • Procurement rose during 2021-22 and 2022-23, surpassing needs due to extra distribution during the COVID-19 pandemic and crop failures.
  • Concerns emerge regarding subsidy estimation at the WTO, citing outdated price calculations leading to inflated figures.
About WTO(World trade organization):

●   WTO: Global organization regulating trade rules among nations.

●   164 members, including the EU.

●   23 observer governments like Iran, Iraq, Bhutan, Libya.

What are the subsidies under WTO(World trade organization?

●   Amber Box: Distorts trade with subsidies for inputs like fertilizers, seeds, and Minimum Support Price (MSP). WTO mandates reduction of trade-distorting supports.

●   Blue Box: Modified amber box with production-limiting conditions. No current spending limits.

●   Green Box: Minimal distortion subsidies for environmental and regional programs, unrestricted in most cases.