India and US protest breach of farm subsidy

Category: WTO Sub-category: International Sanctions
Document type: news

29 Nov, 2010

Amid concerns over growing trade distortions measures - such as export curbs, high tariffs, and incentives to local famers - India, the US and some other countries have protested growing instances of countries doling out higher levels of farm subsidies than agreed upon under the World Trade Organization (WTO).  This would put pressure on the errant countries to lower the trade distorting sops for ensuring food security of their people.

According to a WTO official, four countries have doled out higher food subsidies in 2008 that what they committed - Costa Rica, Poland, Israel and Norway. These countries have a good export market in some niche farm products - half of Costa Rica's exports comprise bananas and coffee. However, the official added that the four countries have said that they would bring down their subsidies to committed levels.

At the Uruguay round in 1995, the WTO member countries had taken on commitments to keep their total farm subsidies within specific levels. At a recent agriculture committee meeting of the WTO, India had pointed out that Costa Rica's breach was particularly hard to explain as it was itself taking steep cuts in farm subsidies and tariffs in the ongoing Doha round.

India and the US have argued that though the breaches may have been triggered by genuine stress arising out of the global financial crisis, they surely undermine the credibility of the WTO's trading system and need to be flagged.