Recently India has appealed against the decision of the World Trade Organization (WTO) Disputes Committee on sugar export subsidy.
- Earlier, Australia, Brazil and Guatemala had complained that India’s domestic assistance to sugarcane growers exceeded the limits allowed by the WTO. At the same time, India also provides prohibited export subsidies to sugar mills. As a result, the Committee in its conclusion found that India was acting inconsistently with its obligations under the Agreement on Agriculture (AOA).
- India is the second largest sugar producer in the world after Brazil.
- India has challenged this decision before the Appellate Body of the World Trade Organization (WTO). This body is the final authority body on such trade disputes.
- The AoA provides specific commitments to reduce support in the areas of domestic support, export subsidies and market access.
- Domestic support to sugarcane growers is provided through measures like Fair and Remunerative Price (FRP), State-Advised Prices (SAPs) etc.
- According to the AOA, domestic support should not exceed the prescribed minimum level.
- This minimum level is fixed at 5% of the output value for developed countries and 10% for developing countries.
- India’s export subsidies include Production Assistance Scheme, Bufferstock Scheme and Marketing and Transport Scheme etc.
- Under the AOA and the Agreement on Subsidies and Countervailing Measures, export subsidies from WTO members are restricted to many agricultural products.
Source – The Hindu