Agri Business

Brazil seeks WTO to set up dispute panel in case against India on sugar subsidy

PTI New Delhi | Updated on July 16, 2019

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Brazil has sought establishment of a dispute panel under the aegis of the World Trade Organization (WTO) in a case against India’s sugar subsidies to farmers.

In February, Brazil and several other countries including Australia and Guatemala have dragged India into the WTO’s dispute settlement mechanism alleging that New Delhi’s sugar subsidies to farmers are inconsistent with global trade rules. Brazil is the largest producer and exporter of sugar in the world.

“Brazil respectfully requests that the dispute settlement body establish a panel,” according to a communication submitted by the South American country to the Geneva-based WTO. Brazil has alleged that in recent years, India has massively increased the level of domestic support under its support regime for sugarcane and sugar.

For example, India has almost doubled the fair and remunerative price for sugarcane from Rs 1,391.2 per tonne in 2010-11 to Rs 2,750 per tonne in 2018-19, it has stated. That fair and remunerative price is the minimum price that, under Indian law, domestic sugar mills must pay sugarcane producers. It constitutes one of India’s most important support measures for sugarcane producers.

In addition, Brazil said some of India’s states provide for higher minimum prices for sugarcane that local sugar mills must pay local sugarcane producers. Seeking consultation is the first step of dispute settlement process. If the two nations are not able to reach a mutually agreed solution through consultation, complainant requests for a WTO dispute settlement panel to review the matter.

They had filed dispute under certain articles of WTO’s Agreement on Agriculture, Agreement on Subsidies and Countervailing Measures and the General Agreement on Tariffs and Trade 1994. If the panel rules against India’s sugar subsidies, India can approach the appellate body of the WTO’s dispute settlement mechanism.

Published on July 16, 2019

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