India uses peace clause fifth time, for rice subsidies given in 2022

New Delhi: India has, for the fifth time, invoked the peace clause for exceeding the 10% ceiling on support it offered its rice farmers. The country informed the World Trade Organization (WTO) that the value of its rice production in 2022-23 was $52.8 billion while it gave subsidies worth $6.39 billion, which comes out to 12.1% as against the permitted 10%.

The peace clause protects India’s food procurement programmes against action from WTO members in case the subsidy ceilings (de minimis)—10% of value of food production in the case of India and other developing countries—are breached.

New Delhi had first invoked the clause in 2020 when it became the first country to do so.

“The de minimis level for rice has been exceeded pursuant to the support provided through public stockholding programmes
for food security purposes which were in existence as of the date of the Bali Ministerial Decision on Public Stockholding for Food Security Purposes,” India told the WTO.

India further said that the stocks under the programme are acquired and released in order to meet the domestic food security needs of India’s poor and vulnerable population, and not to distort trade or

adversely affect the food security of other WTO members.“For these reasons, the breach of the de minimis limits for rice is covered by the peace clause set out in the Bali Ministerial Decision on Public Stockholding for Food Security Purposes,” it said in a notification.India gave input subsidy worth $48.13 billion to its low-income or resource-poor producers for marketing year from October 1, 2022 to September 30, 2023.

This includes support for irrigation, fertilizers, and electricity. As per the agricultural census for the year 2015-16, 99.43% of farm holdings are of low-income or resource poor farmers.