New Delhi: Food Minister Shanta Kumar said on June 6 that the proposed system of charging open market price for food grains from exporters and later reimbursing the differential with export price is impractical and is being kept in abeyance.

"To charge an open market price of Rs 7,000 a tonne and then reimburse Rs 2,650 a tonne a month later is not feasible and will not be implemented till further consultations with the Commerce Ministry," the Minister told reporters.

In May, the government had begun selling wheat and rice to exporters at open market price of different zones and reimbursed the difference with the ex-granary export price, showing it as World Trade Organisation (WTO) compatible subsidy.

The Minister said even the current system of selling grains to exporters at prices little over the rates for below the poverty line families are WTO compatible.

The difference with market prices can be shown as subsidy, which is permissible under WTO regulations, he said adding there is no need to initially receive a higher amount from traders only to reimburse the differential.

"Discussions are on with Commerce Ministry on how to tailor the current mechanism itself in line with the WTO rules rather than implement a roundabout procedure," he said.

Meanwhile, sources said Commerce Ministry is of the view that direct sale of food grains to exporters at a price much below the market rates will invite objections by competing countries in the WTO fora.

This is all the more possible when India has eaten into the grain export market of countries like the USA, Argentina and Australia.

PTI