Last week, in an action long called for by USA Rice, the Office of the U.S. Trade Representative (USTR) has asked the World Trade Organization’s (WTO) Committee on Agriculture to examine India’s market price supports for rice and wheat producers. Detailed analysis of India’s programs submitted by the U.S. government show rice supports are nearly eight times the level, as a percentage of the value of production, allowed under WTO rules.
“We have known for years that certain rice producers, such as India, are heavily subsidizing producers beyond what is allowed by WTO rules,” said USA Rice Chair Brian King. “We appreciate the Trump Administration taking action and view this as an important first step in what we want to become a full court press at the WTO against offenders.”
The filing by the United States is called a “counter notification” and looked at the amount of market price support provided by the Indian government to rice and wheat producers for the 2010/11 to 2013/14 period. The average annual amount of support during this period was the equivalent of just under 80 percent of the value of rice production. The WTO Agreement on Agriculture limits direct market price support to 10 percent of the market value of a commodity.
The agreement also requires members to report producer support in total and for specific products according to an established methodology on a timely basis.
“India has been late in reporting and has used dubious methodology,” said USA Rice COO Bob Cummings. “The U.S. notification goes a long way towards setting the record straight for wheat and rice.”
“Since 2012, India has been the world’s number one exporter of rice, and with these egregious levels of price support, now we know why,” said Bobby Hanks, chairman of the USA Rice International Trade Policy Committee.
The U.S. counter notification is on the agenda for the June meeting of the WTO Committee on Agriculture and Cummings says it will be the start of a serious conversation with India, with the goal being to use all available WTO mechanisms to bring them into compliance with their WTO obligations.
Since 2011, USA Rice has been advocating for, and funding, research on the WTO-compliance of rice support policies of so-called advanced developing countries, which includes India. A 2014 report jointly produced by the U.S. wheat, corn, and rice industries found price support violations amongst many U.S. trading partners. These findings led to a comprehensive analysis of factors affecting the global competitiveness of U.S. rice by the U.S. International Trade Commission in 2015 entitled Rice: Global Competitiveness of the U.S. Industry that has bolstered this latest U.S. government action.
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