Cotton MSP has not breached WTO cap, argues India

India has stated that its selling price support for cotton has not exceeded the de-minimis subsidy limits identified by the WTO. The clarification was in response to queries on the country’s full cotton output and support posed by Australia at a modern Committee on Agriculture fulfill, a Geneva,-based mostly official has stated.

Australia, however, demanded that India give all suitable knowledge on the price of cotton output to confirm that de-minimis limits (subsidy restrict mounted at 10 for each cent of output price) had been not staying breached and also demonstrate why there was a variation in the figure of qualified output (cotton qualified for MSP).

“India also been given thoughts on its described domestic support for rice, general public stockholding, and other support measures as perfectly as on alleged inadequate facts supplied on its quantitative import limitations on pulses and its general public stockpiling,” the official included.

Australia’s contention

On the concern of support for cotton, Australia mentioned that from 2017-eighteen to 2019-20, qualified output under the MSP programme for cotton in India elevated from .07 million tonnes (mt) to one.seventy nine mt. India’s support for cotton thus elevated steeply from $14.83 million to $ 184.83 million, it pointed out, including that the used administered selling price also elevated by $270 for each tonne.

It also brought to the detect of the CoA that the US experienced issued a counter notification on November 9, 2018 indicating that India experienced supplied market selling price support for cotton in excessive of its de minimis limits.

Australia, for that reason, stated that India ought to get rid of light-weight on the price of cotton output and demonstrate the causes for variations in qualified output and confirm that ceiling limits had been not breached, the official included.

It is critical to continue to be within just de-minimis ranges as breaching it could guide to penalty. India can use a ‘peace clause’ to avoid this kind of motion, but it is matter to a variety of challenging specifications and prone to challenge. Indian officers experienced before described that for calculating support price ranges India took inventory only of the quantity that was staying procured by the government at administered price ranges and not the full output. “Countries like the US and Australia have been insisting that the price of selling price support ought to be based mostly on the whole crop as technically it was all qualified for support. But India’s argument is that only the quantity that was procured mattered as selling price support was extended only to that part. This needs to be thrashed out at the WTO as it could guide to extra difficulty for India in the foreseeable future,” the official stated.

Due to the fact of this difference in consideration of qualified output for calculating MSP, some nations around the world this kind of as the US allege that New Delhi has not just breached the de-minimis ranges for rice (as duly notified by the nation) but also for other farm goods this kind of as wheat and cotton.

India thinks that it is unfair to determine MSP support based mostly on portions that have not been procured by the government as farmers did not get any support selling price for this kind of create.

As aspect of a lasting resolution on general public stockholdings, India wishes the WTO to exclude MSP from de-minimis limits or improve the methodology of its calculations to make it extra reasonable and supportive towards poor farmers.

Import curbs

On import limitations on pulses, the EU and Canada joined the US and Australia in criticising the absence of facts supplied by India in its responses over-all.

The EU, Canada and the US experienced asked India to demonstrate how it decides on imposing or getting rid of quantitative limitations on import of pulses.