UPSC Prelims 2024 Q59: International Grains Council — Explained
Consider the following statements:
1. India is a member of the International Grains Council.
2. A country needs to be a member of the International Grains Council for exporting or importing rice and wheat.
Which of the statements given above is/are correct?
- 1 only
- 2 only
- Both 1 and 2
- Neither 1 nor 2
Answer: (a) 1 only
Statement-wise explanation
- 1: correct — India is a member of the International Grains Council (IGC). It is a party to the Grains Trade Convention, 1995, the treaty under which the IGC works, and the IGC's own membership list includes India. India has taken part in IGC work for a long time. A PIB release of July 2003 reports that the IGC moved India from its list of importing members to its list of exporting members.
- 2: incorrect — IGC membership is not needed to export or import rice or wheat. The IGC is an intergovernmental body for sharing information, analysis and consultation on grain markets. It does not license trade or act as a gatekeeper. Thailand and Vietnam are two of the world's largest rice exporters, and neither appears on the IGC's member list. Brazil and China, both large grain traders, are not members either.
How to eliminate
Statement 2 can be ruled out on basic reasoning. It uses the absolute word 'needs'. It turns joining a voluntary commodity forum into a condition for trading at all. No commodity body such as the IGC, the International Sugar Organization or the International Coffee Organization controls who may trade. Trade rules come from national law, such as India's export bans and permissions issued by the government, and from WTO agreements. Once Statement 2 is out, only '1 only' and 'Neither' remain. Settling Statement 1 needs one fact: India is a member of the IGC. A useful clue is that India is one of the world's largest rice exporters and a major wheat producer, so it is the kind of country that sits in a grains forum.
Know more
International Grains Council (IGC)
- Origin: set up in 1949 as the International Wheat Council. It took its present form under the Grains Trade Convention (GTC), 1995.
- Headquarters: London, UK.
- Nature: an intergovernmental forum. It improves market transparency through information sharing, analysis and consultation. It does not fix prices, set quotas or license trade.
- Coverage: cereals (wheat, maize, barley, sorghum, oats, millet and others), rice, oilseeds (soybeans, rapeseed, sunflower), pulses, and products such as flour and biofuels.
- Output: the monthly Grain Market Report, the IGC Grains and Oilseeds Index, and an annual Grains Conference in London.
- Food Assistance Convention: a separate treaty. The IGC Secretariat provides administrative services to its committee.
Who is in, and who is not
| In the IGC | Not in the IGC (yet major traders) |
|---|---|
| India, Pakistan, USA, Canada, Australia, Argentina | Thailand, Vietnam (rice exporters) |
| Russia, Ukraine, Kazakhstan (wheat exporters) | China, Brazil |
| EU (one member for all its states), UK, Japan, Rep. of Korea, Saudi Arabia, Iran | Bangladesh |
How it differs from bodies that do set rules
| Body | Role in grain trade |
|---|---|
| IGC | Market information and consultation; no trade permission |
| WTO | Binding trade rules, including disciplines on export restrictions and the Agreement on Agriculture |
| National government | Actually allows or bans exports (for example, India's wheat export ban and its later relaxations) |
India and the IGC: a PIB release of July 2003 reports that the IGC moved India from its importing members to its exporting members. By then India had become the 2nd largest rice exporter and 8th largest wheat exporter in the world.