Singapore proposal to check food export limits worries India

Source: The Economic Times, Aug 04, 2016

NEW DELHI: A recent proposal by Singapore to the World Trade Organization (WTO), seeking aprohibition on restrictions imposed by governments on export of food stuffs has set off alarm bells in India that it would cramp the government’s flexibility to restrict exports to check prices when there is a shortage in the domestic market.

As per the proposal made a fortnight ago, “importing members will benefit from enhanced transparency in advance of the imposition of export restrictions so that they will have sufficient time to source for other food suppliers on the international market.”

Stating that export restrictions on foodstuffs can have an impact on food security and overall food price volatility as highlighted in the 2008 food crisis, the proposal stresses the need to correct and prevent trade restrictions and distortions in world agricultural markets and adopt measures to ensure the proper functioning of food commodity markets to limit extreme food price volatility.

“We do use minimum export price mostly for agricultural items which are price sensitive…largely, there is transparency,” said a commerce department official. In the recent past, India has imposed MEP on essential commodities like onion, rice, potato and edible oils. India is a food exporting country with total export of $36.17 billion in FY15 and is among the 15 leading exporters of agricultural products in the world with significant exports of rice, meat, oil meals and sugar. Underlining that only eight members have notified 14 export prohibitions and restrictions since 1995 and only one measure was notified from 2005 to 2009, Singapore has sought clarity on such measures including in terms of notifications for export restrictions.

The proposal has become a cause of concern for India as it has often cut down on exports to ensure availability of food supply. If Singapore’s proposal is accepted, it would become difficult for countries like India and China to impose export restrictions with experts warning it could be just an opening for more such restrictions to be lifted. “We must keep this flexibility with us … our room for manoeuvre for managing our economy will suffer if this proposal gets accepted,” said Biswajit Dhar, professor at Jawaharlal Nehru University.

To kick off a “constructive discussion on enhancing transparency in the area of export restrictions,” Singapore has asked food exporting nations to give advance notifications leading to the imposition of the export prohibition and the anticipated period during which it would remain.

“Such a proposal seeks to open a window for other proposals that prohibit export restrictions. If this is agreed to in the context of food stuffs, then the US and Japan could seek to extend it to natural resources also,” said Abhijit Das, head of the Centre for WTO Studies at Indian Institute of Foreign Trade.

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