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Thailand’s criticism on India’s PDS

  • Context (IE): Thailand has replaced its Ambassador to the WTO after India formally protested against her comments on India’s PSH (Public Stockholding) program.


  • The Thailand’s Ambassador criticised India’s rice procurement program (PDS).
  • She suggested that India’s Public Distribution System (PDS) aims more at capturing the export market than benefiting the people.
  • Tensions escalated between India and Thailand due to these comments.
  • Consequently, Indian negotiators reportedly refused to participate in certain discussions where the Thai representative was present during the 13th Ministerial Conference of WTO in Abu Dhabi.

Cairns Group Concern

  • The Cairns Group consistently challenges India’s PSH (Public Stockholding) program at the WTO.
  • It claims that the program is heavily subsidized, distorting global food prices and harms the food security of other nations.
  • The Cairns Group is also attacking the peace clause, triggered after India breached the de minimis limit.
    • The interim peace clause was put in place in 2013 under the Bali Agreement to protect developing countries from being challenged for breach of subsidy levels.
  • Thailand belongs to the Cairns Group, consisting of 20 nations.

About Cairns Group

  • Formed in 1986 in Cairns (City in Australia). It is a coalition of 20 agricultural exporting countries.
  • Primary goal is to enhance global trade in agricultural produce by eliminating export subsidies and trade-distorting domestic support.
  • Significance: They present a unified stance in multilateral trade talks at the WTO.
  • Members: Argentina, Australia, Brazil, Canada, Chile, Colombia, Costa Rica, Guatemala, Indonesia, Malaysia, New Zealand, Pakistan, Paraguay, Peru, the Philippines, South Africa, Thailand, Uruguay and Vietnam, Ukraine.
  • Note: India is not a member.

Concerns regarding India’s PDS

  • India has breached the de minimis limit in the case of rice.
  • The WTO norms say that the support given should be within the 10% de minimis limit in the case of developing countries such as India.
  • India informed the WTO that,
    • The value of its rice production in 2019-20 was $46.07 billion.
    • Subsidies given worth $6.31 billion or 13.7%, as against the permitted 10%.
  • India’s argument:
    • India has questioned the way subsidies are calculated at the WTO, saying it is calculated at a fixed and outdated 1986-88 price, which overestimates the subsidy. India is seeking to change it at the WTO negotiations on agriculture.
    • India has been arguing that the subsidy that it provides is far less than what the US and EU give.
      • Subsidy to Indian farmers: $300 per farmer.
      • Subsidy to US farmers: $40,000 per farmer.
  • Protesting farmers are demanding the removal of the agriculture sector from the WTO agreement.
  • After India, Thailand is the second largest rice exporter in the world.

To know about the Agreement on Agriculture (AoA) in detail, visit > Agreement on Agriculture(AoA).

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