After US, now Australia moves WTO against India; says sugar subsidies to Indian farmers hurting global prices

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Published: November 17, 2018 11:19:44 AM

Indian officials have previously defended their actions on the issue, saying the country's sugar exports are in line with WTO rules as the country does not give a subsidy to its farmers for overseas sales, but instead gives a production subsidy.

Australia has referred India to the World Trade Organization over subsidies it pays its sugar cane farmers, which Australia says has created a global surplus that's affecting its own farmers.Australia has referred India to the World Trade Organization over subsidies it pays its sugar cane farmers, which Australia says has created a global surplus that’s affecting its own farmers.

Australia has referred India to the World Trade Organization over subsidies it pays its sugar cane farmers, which Australia says has created a global surplus that’s affecting its own farmers. Trade Minister Simon Birmingham said Australia made the WTO referral after previously raising concerns with India over what Canberra says are more than $725 million ($1 billion AUD) in subsidies paid to Indian farmers.

Birmingham says while the case may take a long time to be resolved, he hopes it will prompt India to changes its mind on the subsidies.

Initial discussions on Australia’s case would take place at the WTO’s Committee on Agriculture meeting later this month.

Prime Minister Scott Morrison raised the sugar dispute in a meeting with Indian counterpart Narendra Modi on the sidelines of the East Asia Summit in Singapore on Wednesday, saying Australia would take all available steps to resolve the matter. India’s Commerce Ministry spokesperson declined to comment.

Indian officials have previously defended their actions on the issue, saying the country’s sugar exports are in line with WTO rules as the country does not give a subsidy to its farmers for overseas sales, but instead gives a production subsidy.

But Birmingham says the global glut created by India’s subsidies has contributed to a sharp downturn in world sugar prices, which hit a decade-low 9.83 U.S. cents per pound in September.

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