ARLINGTON, Virginia — This week the U.S. Trade Representative (USTR) formally questioned data India has reported to the World Trade Organization (WTO) about its market price support programs for wheat and rice from marketing years 2010/11 to 2013/14. U.S. Wheat Associates (USW) and the National Association of Wheat Growers (NAWG) consider this counternotification (CN) to the WTO Committee on Agriculture as an appropriate and welcome step that further brings transparency to countries’ farm support programs.
“We want to thank USTR and USDA leadership, including Ambassador Robert Lighthizer, Secretary Sonny Perdue, Chief Agricultural Negotiator Gregg Doud, and U.S. Ambassador to the WTO Dennis Shea, and the hardworking staff at USTR and USDA for using available tools to call attention to this abuse of WTO rules,” said USW Chairman Mike Miller, a wheat farmer from Ritzville, Wash. “The proactive use of WTO tools like counternotifications and dispute settlement will help build support for the global trade rules that provide a bulwark against market distorting policies that hurt American farmers.”
India’s domestic support scheme, which USTR and USDA demonstrate is vastly under-reported, creates excess capacity that prevents trade opportunities and sometimes has led to India dumping excess capacity from its massive public stocks. In 2013/14 India was the seventh largest wheat exporter in the world and consistently the largest rice exporter.
The U.S. counternotification covers India’s market price support for wheat and rice. Under its WTO commitments, India may provide subsidies equal to no more than 10 percent of the total value of crop production. In the years covered in the CN, the United States demonstrates through India’s own data that its price support appears to be the equivalent of 60 percent to 68 percent of the value of production for wheat and 74 percent to 84 percent of the value of production for rice.
“India’s large price support program has a negative effect on international markets,” said NAWG President Jimmie Musick, a wheat farmer from Sentinel, Okla. “We welcome this signal from our government that it is not going to accept obvious attempts to cheat the system by India and other countries. We thank the USTR and USDA for its creativity in challenging this policy by being the first country to use the WTO’s counternotifications rule on agricultural domestic support.”
If India does not take corrective actions to bring its programs in line with its WTO commitments, USW and NAWG hope that the United States will coordinate with other affected countries to consider putting forward a dispute settlement case, as it did with China’s domestic support and tariff rate quota policies.