Official: India ready to fight Brazil attack on sugarcane subsidies
NEWDELHI: India has a strong case to fend off an attack on its price policy for some 55 million sugarcane farmers at the World Trade Organisation (WTO) by Brazil’s far-right President Jair Bolsonaro, a senior official with knowledge of the matter said.
“We will protect sugarcane subsidies at all costs because the sector needs government support. We are confident,” the official said on condition of anonymi t y, af t er t he government recently finished reviewing the matter. A panel of top WTO consultants aided the government in reviewing the sugarcane trade regime to avoid violating any WTO clause, he said.
Brazil is the world’s largest sugarcane producer, followed by India. Brazil fears Indian sugar exports could undercut Brazil’s and global prices. Guatemala and Australia are other countries that have raised similar complaints of India’s price policy triggering oversupply. A key reason why Bolsonaro won last year’s presidential election in Brazil was that he promised to get the economy out of a four-year slump. In the dispute, India has been accused of pursuing a policy to guarantee a high minimum price, known as fair and minimum price or FRP, for Indian cane-growers, which has caused production to spike. Along with this, Brazil flagged subsidies for sugar export.
In its complaint, the Brazil trade ministry said: “Suspicion is that Indian domestic support (to farmers) and its subsidies to sugar exports caused significant impacts in the sugar market in a context of falling prices and decreasing production in the main centres Brazil, China and Thailand”. In October, pursuant to the complaint, the WTO issued a statement notifying an adjudicatory dispute settlement body to discuss the complaint “India – Measures Concerning Sugar and Sugarcane”.
According to WTO rules , India is permitted to offer a “productspecific AMS” (Aggregate Measurement of Support) for sugarcane up to 10% of the total value of production of cane. This also generally applies to subsidies across crops, which essentially states that all subsidies to agriculture cannot exceed 10% of their production value.