Agri Business

India’s sugar subsidies, transport assistance, food stocks scrutinised at WTO

Amiti Sen New Delhi | Updated on September 24, 2020 Published on September 24, 2020

Maintenance of surplus stocks has placed additional burden on the food subsidy bill   -  The Hindu

Members also question US’ $-34 billion farm aid, EU’s Covid-19 farm package, China’s border measures

India’s farm sops, including sugar subsidies, transport and marketing assistance and quantitative restrictions on pulses, once again came up for scrutiny and questioning by members of the World Trade Organization (WTO), such as the EU, the US, Canada, Brazil and Australia, this time at the agriculture committee meeting this week.

“New Delhi was also quizzed on the potential impact of its high amount of food stocks, and whether it was breaching its support limit for other farm goods, in addition to rice,” a Geneva-based official told BusinessLine.

The US, on the other hand, was criticised for its steep $34 billion farm aid provided to farmers by members including India, the EU, Australia, Brazil, Paraguay, New Zealand, Uruguay, Paraguay and Colombia expressed strong concerns.

India sugar support

Assuring members that its sugar policies were in order, India shared sugar production figures, the official said. Sugarcane production during the 2020-21 sugar season was estimated at 3,900 lakh metric tonnes, of which 3,000 lakh mt was likely to be crushed producing around 305 lakh mt of sugar, as per the numbers.

Also read: Baseless case against India’s sugar subsidies

New Delhi further clarified that the price of ethanol is fixed by the government to nudge sugar mills to plan the diversion of intermediate sugar products.

Export subsidies

India rejected the questioning of its export subsidies for transport and marketing scheme on the ground that as per the decision taken at the Nairobi Ministerial meeting in December 2015, developing countries were allowed to give such incentives till the end of 2023, the official said. It said that the scheme provides assistance for the international component of freight and for the marketing of agricultural produce.

On the issue of fixing of quantitative restrictions on pulses, India said that it had already explained in an earlier that the measure was intended to secure the livelihood of farmers amid domestic surplus and it invoked the ‘general exceptions’ article of the WTO that allows exemption from rules under certain conditions to justify it.

Also read: India’s support price for rice under WTO lens as US, EU question ‘peace clause’

Answering questions on the potential impact on global market of India’s high amount of food stocks and if it was breaching its support limit for farm goods, in addition to rice, India said that its guidelines for public stockholding scheme showed that the stocks are to be used domestically and not exported.

The EU said India should provide a table with information for all products included in its food stockholding programme so that all could see if limits were being breached.

Also read: WTO and fisheries subsidies: India’s proposal for exempting poor countries gains traction

US’ farm support

WTO members also raised questions about $34-billion farm support extended by the US as it is far higher than $19.1billion ceiling for the country in agriculture domestic support entitlements.

The EU’s Covid-19 support measures were also probed by some members while China’s new border control measures which include testing of imported farm produce were criticised by Australia.

The concerns raised by WTO members at the meetings of various committees, if left unresolved, sometimes result in the filing of official disputes which then have to be settled by a panel.

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Published on September 24, 2020
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