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Saturday, October 5, 2019

India's sugar crisis and WTO- An Important message for the Indian sugarcane farmers

Background note : Currently, India’s sugar and sugarcane related domestic support policies have come under the scanner at the WTO, with Brazil, Australia and Guatemala initiating the dispute process against India (WTO 2019c). The concern these countries echo is that India provides domestic support in excess of its commitment levels and export subsidies for which it has no scheduled entitlements. This alleged inconsistency with the AoA has to be established by the countries successfully before a panel and if appealed, the Appellate Body of the WTO. The dispute is of significant importance to the Complainants as India is an attractive market for sugar products.

Access to this market would open up a potentially large export sector for these countries. In the sugarcane dispute, India’s fair and remunerative price (“FRP”) and the state advised price (“SAP”) are a few of the domestic support measures that are currently facing the challenge, in addition to some alleged export subsidy measures. If India loses the dispute, it would have to modify all measures that have been found inconsistent with the AoA. In the absence of the present support policies the sugarcane sector, which employs over 50 million farmers and over 500,000 sugar mill workers (DFPD 2017a), may face imminent collapse.


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