It is clear from publicly available data that India violates World Trade Organization limits on trade-distorting farm subsidies, said the Trump administration on Wednesday in announcing a “counter-notification” that could be the first step to a formal challenge of India’s wheat and rice subsidies. It was the first time that one country has challenged another’s reports of agricultural subsidies, said the U.S. trade representative’s office.
India is among a handful of countries, including Brazil and China, that U.S. farm groups say routinely break WTO rules on farm spending. The Obama administration filed WTO cases against China over its domestic subsidies for corn, wheat, and rice production and its use of tariffs to discourage imports. India is one of the world’s leading producers of rice, wheat, and cotton.
Two wheat groups, the National Association of Wheat Growers and U.S. Wheat Associates, said that if India does not bring its program into line with WTO rules, the United States should consult with other nations about “putting forward a dispute settlement case, as it did with China’s domestic support and tariff-rate quota policies.” The groups said WTO rules limit India to wheat and rice subsidies worth up to 10 percent of the value of the crops. In the three years covered by the U.S. counter-notification, wheat subsidies ranged from 60 to 68 percent and rice subsidies from 74 to 84 percent.
A U.S. statement said India had “substantially under-reported its market price support for wheat and rice,” based on U.S. calculations that use WTO methodology and public information about India’s supports. The United States says India excluded state-level bonuses when it calculated its supports, did not use the proper figures for crop size, and did not list the total value of the crops in its reports to the WTO. There are also issues with currency conversions. The counter-notification covers the marketing years from 2010/11 to 2013/14.