Charges are flowing thick and fast between developed and developing countries on farm subsidies at the World Trade Organization.

While India has drawn attention to the $12-billion farm package announced recently by the US government, Australia and Canada raised concerns about growing usage of trade distorting subsidies by India and China within permitted levels.

“India addressed the elephant in the room and drew people’s attention to the US’ $12-billion new farm bailout package. A bigger debate on this topic is expected at the Agriculture Committee regular meeting on September 25-26,” a Geneva-based official told BusinessLine .

At a recent Agriculture Committee special session at the WTO, a number of members, including India, gave their comments on how farm subsidies should be curbed.

Members are attempting to reach a consensus on measures to check agriculture domestic subsidies with the aim of reaching a pact at the Twelfth Ministerial meeting (MC 12) of the WTO in June 2020.

India raised the issue of the proposed US farm subsidies when many developed members asked why developing countries need additional subsidies for public stockholding to support farmers besides what has been allowed by Article 6 of AoA (Agreement on Agriculture). “In its rebuttal, India said that even the US itself just announced a relief measure worth $12 billion to support the farmers affected by trade war,” the official said.

According to the package, the US Department of Agriculture will provide payments to corn, cotton, dairy, hog, sorghum, soyabean and wheat producers, will administer a Food Purchase and Distribution Programme to purchase up to $1.2 billion in commodities “unfairly targeted’’ by unjustified retaliation and make available $200 million for development of foreign markets for US agricultural products.

A number of countries including Japan, Australia and New Zealand have questioned the package and asked the US to provide details. India, in its submission, has asked the US to classify this expenditure under the domestic support provisions of the Agreement on Agriculture. These questions will be discussed in the meetings on September 25-26.

Targeting the de minimis (threshold levels) subsidies allowed to countries like India and China, which developing countries have been stating is too less at 10 per cent of production value and should be raised, Australia said there was a significant increase of trade-distorting support, more usage of de minimis subsidies by big developing economies such as China and India.

“It is also evident there is a lot of ‘water’, that is the gap between permitted support and actual spending, in both the de minimis and AMS (aggregate measurement of support used to measure subsidies that are considered trade distorting at the WTO) categories which will allow members policy space to subsidise even more,” Australia said.

India and China, backed by Pakistan, the Africa Group and the ACP Group, stressed that the farm subsidies given by rich countries (AMS) were still the major culprit for asymmetry and imbalances of the agriculture sector and deserves to be the first to go, in spite of the fact the total amount has been decreasing.

The next cluster of dedicated sessions is scheduled for October 22-23, focusing on market access and the special safeguard mechanism.

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