The provisions of the National Food Security Act which relate to providing subsidised food to the poor are fully compatible with WTO rules. It is only the procurement-related support that has to be accounted for in the calculation of trade-distorting support as per WTO rules. Such support has to be kept within certain limits.

The original proposal by the G-33 coalition of developing countries in the WTO, of which India is also a member, proposed that acquisition of stocks of foodstuffs from low-income or resource poor producers for supporting such producers or for fighting hunger and rural poverty should be excluded from the calculation of trade-distorting support. WTO Members could, however, agree to discuss only an interim mechanism. The Indian delegation was mandated to negotiate the terms of such an interim mechanism. During the Ninth Ministerial Conference of the WTO held in Bali, Indonesia from 3 to 7 December 2013, WTO members agreed to an interim mechanism which will be available till Members agree on a permanent solution on this issue for adoption by the Eleventh Ministerial Conference of the WTO.

The information was given by the Minister of State in the Ministry of Commerce and Industry Dr. E.M. Sudarsana Natchiappan in Rajya Sabha today.

Procurement-related support counted as trade-distorting: interim WTO mechanism limits accounting for national food security programmes until permanent solution. The National Food Security Act's subsidised-food measures are compatible with WTO rules, but government acquisition and procurement support must be accounted for as trade-distorting support and constrained by negotiated limits. At the Bali Ministerial members agreed an interim mechanism, negotiated with developing-country participation, to govern treatment of procurement-related support until a permanent solution is adopted.