NEW DELHI (TIP): The United States and Pakistan have questioned several of India’s farm trade policies, including its land holding laws and the subsidy mechanism at the World Trade Organization, which is the latest assault being faced by the country after it raised the red flag over domestic support to farmers in Bali.
Since the Bali ministerial meeting last December, WTO members have repeatedly put the lens on India’s farm sector policies, especially those related to exports and the scrutiny has only gone up since the BJP government blocked a deal on trade facilitation this July, arguing that it will not back it till concerns over domestic support for public stockholding are sorted out.
In a document released by WTO on Wednesday, Australia and Brazil’s attempts to get some answers to their concerns over the export subsidy for sugar once again come through. In a detailed questionnaire, they not only asked about the support that is provided, but Australia has reiterated that the subsidy is not compatible with WTO rules.
Similarly, the US and Canada have expressed concern over India exporting subsidized wheat and the Americans have even given a detailed cost analysis, which includes calculations from Comptroller & Auditor General’s report. The government has, however, parried the questions and did not disclose the data, arguing that the tender process was underway.
In fact, several countries have blocked India’s attempts to push through the plan to allow limitless minimum support price (MSP), arguing that it will help it export subsidized grains into the world market, and distort the price. The government has been exporting excess stock of wheat to reduce the burden on overflowing silos, raising fears that subsidized grains are being sold in the international markets.
Pakistan – which was part of the coalition that was pushing the food subsidy proposal at the WTO but walked out at the last minute – has also alleged that India is following a “double subsidization” process, which means that subsidized inputs such as power and fertilizer are given to farmers along with MSP to offer an assurance to buy the rice and wheat. While India countered it by saying that the policies were in line with the WTO agreement on agriculture, the US and Pakistan have sought detailed data, arguing that India is the largest rice exporter in the world.
For the US, even the farm holdings and land laws in India are a big area of concern as data released by India has showed that between 2000-01 and 2010-11, there was a spurt in the proportion of land with marginal and small farmers, while the population of those with large farms went down. India has responded by saying that this is due to an increase in the holdings or population with existing hereditary laws.