Australia flags India’s sugarcane support at WTO

In a communication to the WTO’s Committee on Agriculture, Australia calculated India’s market price support at Rs 1.52 lakh crore in 2024-25, with the support-to-value of production ratio ranging between 90% and 95% during the period under review 

For now, Australia’s submission is not for a WTO ruling or an order against India. It is a formal request for clarification under the WTO Agreement on Agriculture (AoA) and an offer to engage in discussions about the other trade distorting measures that facilitate sugar exports  But its unusually high estimate could put sugarcane support firmly back on the agenda of the WTO’s agricultural negotiations.

The support of up to 90%-95% that Australia has alleged, however, uses the fixed 1986-88 reference price to determine the value of total output of sugarcane. The use of 1986-88 prices for calculation of domestic support to agriculture has already been questioned by India at different WTO forums. It has sought the revision of this base year.

The 1986–88 fixed external reference price (FERP) was established as a baseline under the WTO’s AoA. It acts as a benchmark to calculate trade-distorting domestic farm subsidies. The reference period was officially locked in during the Uruguay Round of multilateral trade negotiations which lasted from 1986 to 1994.

India’s administered cane prices have increased substantially since 1986-88, while the reference price remains anchored to the historical base period.

The latest intervention follows Australia’s participation, along with Brazil and Guatemala, in the earlier WTO dispute over India’s sugar and sugarcane policies. A WTO panel had ruled against India on several aspects of its sugarcane and sugar export policies, but India appealed the report in 2021, preventing the panel findings from becoming an adopted WTO ruling.