India’s much-derided foodgrain stocking model is now attracting countries like Germany and Brazil which want to emulate it. While India has been facing opposition from the US and other countries at WTO on food stocking issue, the utility of creating food reserves is simultaneously evincing much interest among G-20.
“We must ensure that food reserves, when used in exceptional circumstances, are designed to be targeted, effective, and non-distorting. Furthermore, we must promote policy coherence across sectors, recognising that agriculture, trade, climate, health, and finance must work hand-in-hand to achieve real results,” South Africa’s agriculture minister John Steenhuisen told the G-20 Food Security Task Force recently.
Government sources said most countries in the G-20 block have begun collecting information on the food reserves system that has been in operation in India for last many decades.
Brazil, for instance, has been deliberating on a crop procurement module on the pattern of India’s minimum support price (MSP) system, particularly to help its small farmers, sources said.
Also, Germany is trying to develop a system on the Indian food stocking model to ensure price stability and domestic food security in situations like the Covid pandemic, sources said.
G-20 consensus paper
The G-20 food security task force will soon release a consensus paper as it has already sought feedback from member-countries. “It is expected that creation of food reserves to ensure food security of the people will be advocated for which there is a broad consensus already emerged in September,” a source said.
The US and Paraguay, in a joint submission at the WTO in September, had questioned India’s decision to raise Minimum Support Price (MSP) for rice in 2025 despite “record harvests, exports, stocks and offloading of stocks for ethanol production”.
India, on its part, has always argued that its MSP scheme not only supported small and marginal farmers and fed the poor but also kept global prices in check ensuring food security for LDCs and vulnerable countries. The government buys paddy and wheat directly from farmers at fixed costs and distribute the grains to vulnerable population free of costs.
India was asked to explain the rationale for increasing the MSP for rice in 2025 while it has been claiming benefits under the ‘Bali Interim Decision’ (that allows WTO subsidy limits to be breached), given India’s record harvests, exports, and stocks exceeding what is necessary to meet domestic food aid needs. But India has maintained that it does not export rice from its procured stocks.