Business

Centre rejigging foodgrain inventory management

Cautionary signal: WTO members called for stronger
safeguards against release of stocks in global markets

Cautionary signal: WTO members called for stronger safeguards against release of stocks in global markets  

To obviate export of surplus; allay fears at WTO

The Centre is understood to be carrying out an urgent overhaul of inventory management of foodgrains to eliminate scenarios where it is compelled to allow exports from public stockholding of these items.

The move is to allay the fears of some World Trade Organisation (WTO)-member nations that India could export surplus grains from food security stockpiles to markets overseas at subsidised prices and distort international trade, official sources told The Hindu.

The development also assumes significance as it comes in the backdrop of increased efforts by India to ensure a permanent solution to the public stockholding issue at the WTO-level talks by this December.

As per the WTO, public stockholding is a policy tool used by governments to purchase, stockpile and distribute food when needed. “While stocking and distributing food is permitted under WTO rules, governments purchasing food at prices higher than market prices are considered to be subsidising their farmers,” the global trade body had said.

The Department of Commerce (DoC) — the nodal body for WTO-related matters — recently asked the Department of Food and Public Distribution (in charge of procurement and distribution of foodgrains) to expedite the overhaul of foodgrains inventory management so that “the need for exports from public stockholding of these items can be obviated,” the sources said.

Incidentally, in July 2012, the Centre had approved the export of two million tonnes of wheat “for managing the over-flowing wheat stocks in the central pool.” The move was aimed at “disposing of the excess wheat stocks from the central pool to make space available for the forthcoming kharif crop of paddy and then wheat crop in the rabi Season,” the Centre had said then.

According to a WTO report on the informal agriculture negotiating session held at the WTO-level during July 19-20, some WTO member-countries had said “public stockholding programmes could yield ‘unintended consequences’ if governments unloaded the stocks on world markets and impact on prices for similar products in other countries.” The report said those WTO members, therefore, “stressed the need for stronger safeguards to address potential direct and indirect release of stocks in international markets.”

‘Permanent solution’

It, however, added that all the WTO members reaffirmed the commitment made at the WTO’s Ministerial Conference (its highest decision-making body) in Nairobi (in December 2015) “to engage constructively to negotiate and make all concerted efforts to agree and adopt a permanent solution” to the public stockholding issue by the 11th Ministerial Conference scheduled for December at Buenos Aires.

Meanwhile, Commerce Minister Nirmala Sitharaman told the Lok Sabha on July 31 that “India has a long-standing position on the need to prioritise the agreed mandate of the (WTO’s ongoing) Doha Round (negotiations), in particular, the Ministerial decision to find a permanent solution by December 2017 on public stockholding for food security purposes, which relates to protection of our food-grain procurement programme at Minimum Support Prices and subsidised distribution to economically weaker sections.”

The government is committed to pursuing this issue in the WTO, she said.

Online procurement

According to the Ministry of Consumer Affairs, Food and Public Distribution, steps taken to improve foodgrain management include bringoperations of Food Corporation of India (FCI) godowns online, using FCI’s software for Online Procurement Management System (OPMS) for procurement and about 20 states either fully or partially implementing OPMS.

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Printable version | Jun 4, 2020 1:59:01 AM | https://www.thehindu.com/business/centre-rejigging-foodgrain-inventory-management/article19525439.ece

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