Thailand and Indian Subsidies at WTO

Context: Thailand has replaced its Ambassador to the World Trade Organisation (WTO) after India formally registered a protest over her comments on India’s PSH (Public Stockholding) programme.

Thailand’s Concerns

• Cairns Group’s Position: Thailand, along with the Cairns Group (a group of 20 nations advocating for agricultural trade liberalisation) highlighted that:
  • India’s Public Distribution System (PDS) procures rice from producers at a minimum support price (MSP) and sells it at subsidised rates to the public.
  • Thailand argues this is not solely for the benefit of the people but also to “capture” the export market.
• De Minimis Limit: The AoA stipulates a product-specific support limit of 5% for developed countries and 10% for developing countries.
  • India’s Breach of Limits: India exceeded the 10% de minimis limit for rice, contributing to international discontent.

India’s Argument and Demand

• Subsidy Calculation Dispute: India has challenged the WTO’s subsidy calculation method, which is based on outdated 1986-88 prices.
• Critique of Peace Clause: India and other developing nations criticise the ‘peace clause‘ for its stringent conditions and seek a permanent solution for PSH.
• Comparison of Subsidies: India points out that its subsidies are significantly lower than those provided by the US and EU.

Indian Farmers’ Stance

They demand:

• Removal of the agriculture sector from the WTO agreement.
• Legal guarantees for MSP (Minimum Support Price).
• Debt waiver.
• Implementation of Swaminathan Commission recommendations on agriculture issues.
• Pensions for farmers.

Potential Issues with Leaving the WTO: Experts warn that exiting the WTO could:

• • Limit India’s ability to challenge subsidies of developed nations.
  • Pose problems for India and other developing countries in the long run.

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