Stop controlling sugarcane prices, procurement & exports: WTO to India

A World Trade Organisation (WTO) panel has asked India to withdraw the country’s “prohibited subsidies under the Production Assistance, the Buffer Stock, and the Marketing and Transportation Schemes” in the sugar sector within 120 days from the adoption of the panel’s recommendation. India has termed the Panel’s adverse findings based on complaints from some member countries against the schemes to support sugarcane producers and exporters as erroneous. The country will appeal against the panel’s decision, commerce ministry has stated.

The WTO panel’s report on December 14 was based on a complaint filed by Australia, Brazil and Guatemala in 2019 against India’s policy measures in the sugar sector. The three countries challenged the policy measures by claiming that the domestic support provided by India to sugarcane producers is in excess of the limit allowed by the WTO and that India provides prohibited export subsidies to sugar mills.

“The WTO panel has made certain erroneous findings about our schemes to support sugarcane producers and exports. The findings of the Panel are completely unacceptable to India. The Panel’s findings are unreasoned and not supported by the WTO rules. The Panel has also evaded key issues which it was obliged to determine. Similarly, the Panel’s findings on alleged export subsidies undermines logic and rationale,” the ministry statement said.

According to the ministry, the finding will have no impact on any of India’s existing and ongoing policy measures in sugar sector and the country has initiated all measures necessary to protect it's interest and file an appeal at the WTO against the report, to protect the interests of its farmers.

“The measures are consistent with India’s obligations under the WTO agreements,” the ministry said.

Brazil had alleged that India's domestic support for sugarcane though the fair and remunerative price (FRP), state advised prices (SAP) and other domestic support measures is inconsistent with its domestic support obligations under Part IV of the Agreement on Agriculture. Brazil also complained that India's domestic support for sugarcane far exceeds the permissible 10 per cent de minimis level that applies to India and hence inconsistent with Article 7.2(b) of the Agreement on Agriculture of the WTO.