India notifies WTO of $56B farm support in 2010-11

Geneva | Reuters –– India spent US$56.1 billion on support for farmers in 2010-11, it said in a World Trade Organization filing on Wednesday, a document that will be pored over for evidence that it breached agreed limits on agricultural subsidies.

The U.S. and other WTO members have strongly criticized India for being almost a decade behind with notifications on farm support and for vetoing a landmark WTO agreement because it wanted more attention paid to its demand to be able to stockpile subsidized crops to ensure food security.

The notification will enable India to argue that it is meeting its obligations, reinforcing its call for more freedom to subsidize farmers to help feed the poor.

India’s filing, covering the seven years from 2004-05 to 2010-11, detailed subsidies that are permitted by the WTO as well as other measures that it said were exempt from the global trade body’s rules.

The 27-page document showed subsidies for poor farmers — such as for fertilizers, irrigation, electricity and seeds — almost tripled over the period, from $10.3 billion to $29.1 billion (all figures US$). It also showed a large rise in the bill for state food stockpiles for food security purposes, which rose from $5.7 billion to $13.8 billion.

A third large component was the provision of cheap loans to farmers and debt waivers, which began in 2006-07 and was worth $3.3 billion in 2010-2011.

The filing also showed the prices the government paid farmers for crops such as rice, wheat and cotton in each year, and said the level of price subsidy was within the allowed limit of 10 per cent of the market value of total production, without giving that data in full.

It suggested that rather than paying farmers too much for their crop, it had in fact paid them too little — wheat received a negative price subsidy throughout the seven years, as did rice and cotton in the first few years covered.

That implies that even in the commodity boom years, India was offering its wheat farmers less than the WTO reference price, which is based on international prices in 1986-1988.

Reporting for Reuters by Tom Miles in Geneva.

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