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India is collecting data to refute allegations of subsidised wheat exports made against it by the US and Canada at the World Trade Organisation.
“The allegations are false as they are based on the faulty assumption that the administration cost of procuring and storing wheat in the country is almost half the acquisition price of the foodgrain,” a Commerce Department official told Business Line .
The fine print The Ministries of Commerce and Agriculture are now working out the actual costs involved in each stage right from when the crop is sent out of the farms up to the point of distribution, the official added.
If the US and Canada can prove that India is selling subsidised wheat, the country could be either forced to stop exporting at the existing prices or face penalties. The two countries raised concerns about the on-going export of 2 million tonne of wheat by Food Corporation of India – the Government agency responsible for procuring foodgrains from farmers and distributing it – at a recent meeting of the WTO’s Committee on Agriculture.
Canada complaint Canada complained about India lowering the floor prices for wheat exports from $300 per tonne to $260 per tonne which was less than the price of about $275 per tonne being offered by other exporters in the global market.
US claim The US said India was selling wheat at prices lower than its acquisition cost. It argued that although FCI’s acquisition price from farmers was at an estimated $220 per tonne, which is much lower than the price at which India was exporting wheat, if one would add administration costs to it, the actual cost would be much higher.
Indian contention Indian officials, however, contend that the numbers are over-estimations. “The US has assumed administration costs at 40 per cent of the total acquisition cost which is way too high,” the official said.
India will supply its own estimates of administration costs of wheat when the Committee of Agriculture meets next.
“Our officials and economists are working on the numbers. We will be ready with it soon,” the official said.
The issue of subsidised food procurement by FCI for the country’s Food Security Programme was a matter of great debate at the recent WTO meeting in Bali.
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