India giving rice and wheat production vast support, US tells WTO

Geneva (Reuters): India is supporting its rice and wheat farmers with payments that are far higher than the amounts allowed by the World Trade Organisation, the United States said in a statement published by the WTO yesterday.

“It appears that India provides market price support (MPS) for wheat and rice vastly in excess of what it has reported to the WTO,” the US statement said.

“India’s apparent MPS for wheat appears to have been over 60% of the value of production in each of the last four years for which India has notified data. Its apparent MPS for rice appears to have been over 70%.”

Anything over 10% would break WTO rules, it added.

India has made reform of agricultural subsidies a major negotiating issue at the WTO in the past five years.

It has won preliminary WTO backing for a system of public stockholding of farm produce for food security purposes, but the United States and others have been wary of its plans, warning that payments which encourage production could lead to oversupply and, potentially, a spillover onto world markets.

In its analysis, the United States looked at India’s payments for the four most recent years that it had notified to the WTO, from 2010/11 to 2013/14.

The US statement said that India was the world’s second or third largest agricultural producer, while its agricultural exports increased by 22% during the years in question, as it moved from being the 10th to the seventh largest exporter.

It was the world’s top rice exporter, with 20% of its crop covering a third of the world export market.

In 2013/14, India had notified MPS for rice of INR 120 billion ($1.78 billion), equivalent to 5.45% of the value of rice production. By the US calculation, the true figure was over INR 1.780 trillion ($26.43 billion), or 76.9% of production.

Payments for wheat in the same year were officially a negative INR 49 billion, whereas the US analysis put them at INR 965 billion, or 65.3% of the value of production.

The United States has campaigned for WTO members to be more transparent about their trade policies, both to comply with WTO rules and to guard against hidden protectionism. It said it wanted to discuss its findings and their significance for world markets.