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Info Service on WTO and Trade Issues (May26/08) Geneva, 13 May (D. Ravi Kanth) -- India has once again notified the World Trade Organization's Committee on Agriculture (CoA) that "it has exceeded the de minimis limit" for rice for the marketing year 2024-2025 pursuant to the Bali Ministerial Decision on Public Stockholding for Food Security Purposes. The notification comes ahead of the Committee's scheduled meeting on 27 May. Significantly, the notification (G/AG/N/IND/40) submitted by India on 24 April suggests that India appears to have included several new items - such as cotton, groundnuts, pulses, rapeseed oil, yellow soybean and sunflower - in addition to rice and wheat, under the Bali decision. Amid attempts by the United States, Australia, Paraguay, and Ukraine to "name and shame" India over New Delhi's alleged breaches of its de minimis commitments, a major American rice lobby is apparently planning to host an event on the margins of the CoA meeting. That event is expected to highlight the alleged threat posed by India in the international rice market through its provision of billions of dollars in subsidies in recent years, said analysts, who asked not to be identified. Strangely, the repeated efforts by the US and even Australia "to embarrass" India comes at a time when the bilateral free trade agreement negotiations between Washington and New Delhi are in the final stages. According to several media reports, India is likely to agree to sweeping commitments to reduce both tariffs and non-tariff barriers (NTBs) to seemingly appease the subsidy-driven US farmers, said analysts. INDIA'S NOTIFICATION In its notification, India said that its "submission also contains India's notification pursuant to the Bali Ministerial Decision on Public Stockholding for Food Security Purposes (WT/MIN(13)/38) and the General Council Decision (WT/L/939)." India has notified "the Committee on Agriculture that it has exceeded the de minimis limit specified under Article 7.2(b) of the Agreement on Agriculture (AoA) for rice, a traditional staple food crop, for the marketing year 2024-2025." According to New Delhi, "the de minimis level for rice has been exceeded pursuant to the support provided through public stockholding programmes for food security purposes ("PSH programmes"), which were in existence as of the date of the Bali Ministerial Decision on Public Stockholding for Food Security Purposes (WT/MIN(13)/38)." India argued that it "has fulfilled and continues to fulfil its domestic support notification requirements under the AoA in accordance with document G/AG/2 of 30 June 1995, including in respect of its PSH programmes." Further, "the stocks under the programme are acquired and released in order to meet the domestic food security needs of India's poor and vulnerable population, and not to distort trade or adversely affect the food security of other Members," India said. "For these reasons," India added, "the breach of the de minimis limit for rice is covered by the peace clause set out in the Bali Ministerial Decision on Public Stockholding for Food Security Purposes (WT/MIN(13)/38) and the General Council Decision (WT/L/939)." According to the document submitted by India, its domestic support notification for 2024-25 under G/AG/2, as well as additional information pursuant to paragraph 3 of the Bali Ministerial Decision in respect of the PSH programme for rice, is as follows: 1. The product-specific AMS (aggregate measurement of support), which is often treated as the most trade- distorting support, for the marketing year of 1 October 2024 to 30 September 2025, for rice is around USD 7.6 billion. It has breached the 10% de minimis limit by a large percentage margin in value terms. 2. The product-specific AMS for cotton, which is not included under the Bali "peace clause", is around USD 1.26 billion. 3. The product-specific AMS for pulses is around USD 929.36 million. 4. The product-specific AMS for soyabean yellow is USD 695.60 million. 5. The product-specific AMS for wheat is USD 604.62 million. The non-product specific AMS, according to the Indian notification, is around USD 3.76 billion. Clearly, it seems to be a huge breach with regards to rice that is going to raise the angst on India's mounting subsidy programs, said farm trade analysts, who asked not to be quoted. COUNTER-NOTIFICATIONS Meanwhile, the US and other farm-exporting countries, in an apparent attempt to tarnish India's image, have repeatedly filed counter-notifications challenging India's estimates, said analysts. In a document (G/AG/W/259) submitted on 26 March, titled "Certain Measures of India Providing Market Price Support to Rice and Wheat," the co-sponsors - the US, Australia, Paraguay, and Ukraine - argued that they "have compiled data and information on India's market price support (MPS) for rice and wheat." The co-sponsors justified their submission on the grounds that they are informing other members "in the interest of promoting transparency surrounding India's MPS policies." Although the co-sponsors stated that their document "is for the purpose of discussion by WTO Members," the underlying intention appears to be to show that India's calculation of market price support seems flawed. The co-sponsors argue that the "apparent MPS as an estimated percentage of the value of production for rice and wheat for marketing year 2023/24" is over 86% for rice and 69.4% for wheat as regards product-specific de minimis. According to the co-sponsors of the counter-notification, India "is the world's second largest agricultural producer by value," while it is "the second largest rice producer, by volume, with production growing 31% or 48.9 million metric tonnes (mmt) from 2012 through 2023." Drawing a comparison between the rapid growth and total volume of global rice production, which grew by just 7.5%, or 70.5 mmt, over the same period, the co-sponsors maintain that "India's agricultural exports in 2023 were worth USD 43 billion and India was the world's ninth largest agricultural exporter." According to the co-sponsors, "India's agricultural export growth of 15% from 2012 to 2023 has been supported by India's rice exports, which increased by 413% over the same period, accounting for 23% of all Indian agricultural exports, by value and up from just 5% in 2012." The co-sponsors argued that "India is also a particularly significant player in the international market for rice." They said that "since 2012 [the year before the WTO's ninth ministerial conference in Bali, Indonesia, in December 2013], India exported more rice, by value, than any other country and nearly twice as much as the next largest exporter." "In total," according to the co-sponsors, "Indian rice exports accounted for nearly 40% of worldwide exports in 2023. These exports amounted to 18% of India's domestic rice production in 2023." "In addition to being a major agricultural producer," the co-sponsors maintained that "India is also a major provider of agricultural domestic support." "India's most recent domestic support notification covered under this document included approximately USD 55 billion in trade-distorting domestic support under Article 6 of the AoA and India has been one of the top notifiers of Article 6 support for many years," they said. The co-sponsors of the counter-notification said: "While India provides a variety of domestic support to its producers, input subsidies and MSPs appear to be the primary support mechanisms," on grounds that "this support appears to have contributed to expanding production and government stocks, coinciding with increased exports." However, India has rejected the claims made by the four countries during past CoA meetings, arguing that the cited calculations are seemingly biased and flawed. Interestingly, the timing of the likely meeting of the American rice lobby on the margins of the regular CoA meeting on 27 May could result in a "naming and shaming" of India over its rice exports. More importantly, at a time when the US and India appear to be in the last stages of the proposed bilateral free trade agreement, which is likely to lead to sweeping concessions for American farm producers in the Indian market, the repeated attempts to "throw India under the proverbial bus" may only further embarrass New Delhi back home, said analysts who asked not to be quoted. Besides, India's latest attempt to notify products other than cereals in the public stockholding list may also raise questions about the Indian farm policies, said analysts, who asked not to be quoted. +
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