GS Paper - 3 (Economy)

Ahead of a key ministerial meeting of the World Trade Organization (WTO) this month, at least 60 countries including India, China, Pakistan, Egypt, Indonesia and South Africa have proposed a new method to calculate subsidies given to purchase, stockpile and distribute food to ensure food security for developing and poor nations.


  1. The G33, African Group and the ACP (African, Caribbean and Pacific) groupsubmitted a joint proposal to the WTO in which they said a permanent solution for public stockholding should account for inflation and also be based on a recent reference price instead of an old one based on 1986-88 prices.
  2. They proposed that exports of food grain from public stocks be allowed for international food aid and humanitarian purposes to the needy countries.
  3. The proposal has a huge political weight behind it, and it is crucial as such a large number of countries have come together at a time when global food prices are rising and they need to ensure public stockholding of food.
  4. They have suggested a new methodology to calculate the subsidies by either accounting for “excessive inflation” in the External Reference Price (ERP) or calculating the ERP based on the last five years excluding the highest and the lowest entry for that product.
  5. ERP is the average price based on the base years 1986-88 and has not been revised for decades.