This week, the Office of the U.S. Trade Representative (USTR) filed its second “counter notification” on India’s rice and wheat subsidies to the World Trade Organization’s (WTO) Committee on Agriculture.

The counter notification details the flaws in India’s notification methodology, which obscures the true level of subsidies it provides. The submission was co-sponsored by Australia, Canada, Paraguay, Thailand, and Ukraine, demonstrating the global impact of India’s trade-distorting subsidies.

The measure estimates that if India correctly calculated the level of support they provide to their rice farmers through domestic subsidies that they would be at 78.6 percent of the market value in 2014/15, and up to 93.9 percent in 2020/21, compared to the 10 percent limit India agreed to when it joined the WTO.

USA Rice has long called on the Biden Administration, and preceding administrations, to file a dispute settlement case against India’s domestic support for rice because of the trade distorting impacts on the U.S. and the rest of the world’s markets.

Due to India’s actions to stimulate rice production, U.S. rice farmers, and rice farmers throughout the world, are forced to sell their crop at a lower cost, bringing back less assistance to their own rural communities. The artificially low-priced Indian rice impacts every continent, and India is projected to break their own export record again this year.

The U.S. filed the WTO Committee on Agriculture’s first ever counter notification in 2018 (see USA Rice Daily, May 10, 2018), also against India’s rice and wheat subsidies, leading to India’s more regular notification of support for rice in each year since. The 2018 counter notification was submitted just by the United States.

“We commend USTR on filing this counter-notification and moving us closer toward a dispute settlement case against India,” said Bobby Hanks, Louisiana rice miller and chair of the USA Rice International Trade Policy Committee. “It is important to note that other key governments – including developing countries – are also clearly alarmed by the growing economic damage caused by India’s behavior.”

This strategic move by the United States comes on the heels of India’s 2022 notification where they admitted to providing $7.55 billion to their rice farmers last year, a figure equivalent to 15.2 percent of its overall value of production. Once again, India used the cloak of food security to justify their over-subsidization.

Source: AgFax