India's food security law is against WTO norms, distributes highly subsidized food to 67% population: UNDP

In what may sound music to the ears of the Narendra Modi government, the United Nations Development Programme (UNDP) has warned India that the National Food Security Act (NFSA), 2013, promulgated by the previous UPA government, has put India at loggerheads with the World Trade Organization (WTO).
A highlighted sub-section titled “WTO and India’s national development policies” of the chapter “Transforming global institutions” in the UNDP’s “Human Development Report 2016” says, the “right to food” is the “biggest ever food safety net programme, distributing highly subsidized food grain (61 million tonnes) to 67% of the population.”
However, warns the report, “The scale of buying grain from poor farmers for sale to poorer consumers puts India at risk of violating its WTO obligations in agriculture”, insisting, WTO members “are subject to trade sanctions if they breach a ceiling on their agricultural subsidies.”
Pointing out that “the method of calculating the ceiling is fixed on the basis of 1986–88 prices and in national currency, an unusually low baseline”, the report states, “This clear asymmetry in international rules reduces national space for development policy.”
Says the report, “India, as other developing countries, did not have large agricultural subsidies when the rules were originally agreed”, adding, “The act – which aims to stave off hunger for 840 million people and which can play a pivotal role in the UN agenda to end hunger everywhere – is being challenged.”

The reason for the challenge is, says the report, “it raises India’s direct food subsidy bill from roughly $15 billion a year to $21 billion”, adding, “In comparison, the United States increased its agricultural domestic support from $60 billion in 1995 to $140 billion in 2013.” 

“The matter has not been resolved, except for a negotiated pause in dispute actions against countries with existing programmes that notify the WTO and promise to negotiate a permanent solution”, the report states.

The warning comes despite the fact that, on a scale of 1, UNDP’s Human Development Index (HDI) for India is found to be 0.625, ranking the country No 131st among 185 countries. However, calculated by taking into account inequality, the Inequality-adjusted HDI (IHDI) is 0.443, suggesting a loss of 29.2%, ranking the country 131st among 179 countries.

Arrived at on the basis of different types of inequalities, the report states, the report calculates human inequality coefficient to be 26%, inequality in life expectancy at birth 24%, inequality in education 29.4%, and inequality in income 16.1%. Further, the report finds there is a gender gap in the HDI of males and females – it is 0.549 for females and 0.671 for males.
UNDP says, “The international agenda should be to set rules to expand trade in goods, services and knowledge to favour human development and sustainable development goals”, insisting, “The key reforms to advance this agenda include finalizing the WTO’s Doha Round, reforming the global intellectual property rights regime and reforming the global investor protection regime.”
Underlining that “multilateral and bilateral organizations determine the main rules and standards” in this report, UNDP says, “For trade in goods and services the WTO is the main standard-setting entity: Member countries are bound by its norms.”