Category: Agricultural Subsidies in developed countries

In a joint paper submitted to the WTO’s [World Trade Organization] Committee on Agriculture, on July 17, 2017, India and China have lambasted developed countries including the US, the EU and Canada for consistently giving trade-distorting subsidies to their farmers at levels much higher than ceiling applicable to developing countries in respect of to such subsidies. According to the paper, “developed countries corner more than 90 per cent of global Aggregate Measurement of Support [AMS] [a technical jargon for trade-distorting subsidies] entitlements amounting to nearly US$160 billion which is beyond their de minimis [maximum permissible level of AMS]. In contrast, most developing countries have access only to de minimis resulting in a major asymmetry in the rules on agricultural trade.” The overarching objective...

At a recent meeting of agriculture committee of the WTO [World Trade Organization] held on March 28, 2017, developed countries lambasted India on its minimum support price [MSP] programs for wheat and other key commodities such as sugarcane and pulses. While, Australia raised concerns over increase in India’s MSP for wheat since 2006, US and EU questioned subsidies on sugarcane, buffer stock of pulses and price support for both rabi and kharif crops. But, there was little movement on ‘permanent solution for legitimizing its food procurement subsidies’, an issue of great concern to India. Ever since, World Trade Agreement [WTA] came into effect in 1995, developed countries have been obfuscating the issues concerning commitments of member countries. While, on one...

Roberto Azevedo who was recently in Delhi to explore and understand India’s perspective on issues for taking up in the 11th WTO [World Trade Organization] ministerial scheduled for December 11-14, 2017 stated “one has to be patient for a permanent solution and asked not to undermine the efficacy of the peace clause”. Azevedo exhortation is unmindful of the vulnerabilities of developing countries inherent in the ‘peace clause’. When, the provision itself stands on a slippery foundation, there is every reason for them to be impatient and hence, their search for permanent solution. Let us look at some basic facts. At the 9th ministerial in Bali [December, 2013], developed countries had agreed to a ‘peace clause’ under which, if a developing...

Jeff Zients, Director of the National Economic Council, who is in Delhi for second “US-India Strategic and Commercial Dialogue” has said that ‘US is ready to increase engagement with India to find new common ground at WTO [World Trade Organization] and asserted that the future looks “bright” for this global trade body.” Zients who co-chairs the second US-India CEO Forum alongside the US Secretary of Commerce Penny Pritzker further noted that “the last two WTO Ministerial Conferences in Bali and Nairobi were significant successes, including outcomes on the Trade Facilitation Agreement [TFA], agricultural export subsidies, and public stockholding for food security purposes.” These euphoric statements are at substantial variance with what actually transpired at these conferences. In a brazen display...

In a severe indictment of India’s stand at World Trade Organization [WTO], the Economic Survey [2015-16] presented to parliament in February, 2016 unequivocally questioned India’s long-time stance of insisting on special safeguards mechanism [SSM] and permanent solution to its public stock holding issue. Dr Arvind Subramanian, author of the Survey and chief economic advisor [CEA] argued that the country’s strategy should instead evolve around the need to shift away from tariff armours for producers to domestic support, and that too at an appropriate level and form. He pointed out that the policies being defended are those that “India intends to move out of in any case” due to well documented impacts, including a decline in water tables and over-use of...

In a brazen display of ‘might is right’ in the just concluded World Trade Organization’s [WTO’s] 10th ministerial meeting at Nairobi [Kenya] on December 15-19, 2015, the developed countries led by US & EU literally junked the Doha Development Agenda [DDA]. On the two issues of critical importance to developing countries viz., (i) public stock holding for food security and (ii) special safeguards mechanism [SSM] in agriculture, they were merely handed out hollow assurances. At the 9th ministerial in Bali [December, 2013], developed countries had agreed to a ‘peace clause’ under which, if a developing country gives agricultural subsidies in excess of 10% of its agricultural GDP, no member will challenge this until 2017 when WTO would look for a...