Piysuh Goyal, Commerce and Industry Minister, on February 9, 2021, assured that the minimum support price (MSP) operations going on in the country are fully compliant under World Trade Organization (WTO) rules.
This is what he said to the media: “We have a Peace Clause under which for our public procurement purposes, we are permitted to buy from the marketplace and the MSP operations that we are currently doing are completely WTO compliant."
This was in response to the questions raised by certain WTO members who have alleged that the MSP provided by India is disturbing the Indian market conditions and that the government has told the protesting farmers that this MSP will stay.
As per the global trade norms, a member country of the WTO should have a food subsidy bill that does not cross 10% of their production value. This is based on the reference price of 1986-88. No member should cross this limit.
Under the Peace Clause, all members of the WTO agree to stay within this limit. The Peace Clause exists until the world finds a permanent solution to the issue of food stockpiling.
