Five years after the U.S. Trade Representative first notified the World Trade Organization that India does not report the true level of support it provides to its farmers, other countries are adding their voices.
In a counter notification filed with the WTO earlier this week, the United States joined with Australia, Canada, Paraguay, Thailand, and Ukraine to once again document how much India’s wheat and rice subsidies exceed allowable limits.
“They are so far out of compliance with their WTO commitments in terms of trade distorting domestic support that it's not even funny,” said Gregg Doud, the Trump administration's chief ag negotiator at USTR and the first U.S. trade official to provide an official notification about India’s wheat and rice subsidies in 2018. Unfortunately, he said, “nothing has changed” in the last five years.
That’s despite several lawmakers continuing to raise the issue and calling for U.S. trade officials to do more.
Senate Ag Committee ranking member John Boozman, R-Ark., highlighted the issue during a panel hearing last month, noting “rice and wheat farmers throughout the country are seriously impacted by India's blatant WTO violations.” In 2021, he was joined by 17 other senators in a letter asking the Biden administration to pursue a WTO case against India’s domestic support for wheat and rice. A similar request in the U.S. House of Representatives was led by Reps. Tracey Mann, R-Kan., and Rick Crawford, R-Ark., and signed by 26 other members.
Under its WTO commitments, India may provide subsidies equal to no more than 10% of the total value of crop production. In 2022, India admitted to providing $7.55 billion to their rice farmers last year, a figure equivalent to 15.2% of its overall value of production.
But according to the counter notification, India has subsidized a much larger portion of the value of production for rice and wheat.
Between the 2014/15 and 2020/21 marketing years, the market price support as an estimated percentage of the value of production for rice has ranged from almost 79% to almost 94%, and the MPS for wheat has ranged from 65% to over 83%, according to the counter notification.
Grower groups in the U.S. hope the data will continue to generate more global attention to India’s subsidies — especially with two developing countries, Thailand and Paraguay, signing on to this most recent counter notification. Eventually, this information could pave the way to a formal WTO dispute.
“Due to India’s actions to stimulate rice production, U.S. rice farmers, and rice farmers throughout the world, are forced to sell their crop at a lower cost, bringing back less assistance to their own rural communities,” according to a statement from the USA Rice Federation. “The artificially low-priced Indian rice impacts every continent, and India is projected to break their own export record again this year.”
Don’t miss a beat! It’s easy to sign up for a FREE month of Agri-Pulse news! For the latest on what’s happening in Washington, D.C. and around the country in agriculture, just click here.
Bobby Hanks, Louisiana rice miller and chair of the USA Rice International Trade Policy Committee, commended USTR on filing the counter notification and “moving us closer toward a dispute settlement case against India.
“It is important to note that other key governments — including developing countries — are also clearly alarmed by the growing economic damage caused by India’s behavior,” Hanks said.
U.S. wheat organizations also praised USTR’s action.
“We appreciate USTR’s continued efforts to highlight India’s trade-distorting wheat subsidies and its lack of transparency,” said US Wheat Associates President Vince Peterson. “We urge USTR to take all necessary steps to ensure India brings these subsidies into compliance with their WTO commitments.”
National Association of Wheat Growers CEO Chandler Goule noted U.S. farmers understand the importance of supporting producers, but called India’s approach “the wrong way to do it.”
“More transparency is critical to restoring trust in the rules-based trading system, but even more important is for countries to follow through on their commitments.”
For more news, go to: www.Agri-Pulse.com.
