New Delhi: Several member countries of the World Trade Organization (WTO), including Canada, Brazil, Australia, Japan, the UK, and the US, have questioned India over the 50 percent increase in the support it provided its farmers in 2022-23.
Other decisions, too, by the Indian government have come under question, such as the 21 percent increase in the amount it has allocated for public stockholding for food security, whether it includes actions by states when it calculates the quantum of its food subsidy, and when it will release updated data on its farmers.
According to a submission to the WTO’s Committee on Agriculture in March 2024, India said its input subsidies for “low-income or resource-poor” farmers stood at $48.1 billion in 2022-23. This is a 50 percent increase over the $32 billion it reported for 2021-22.
Some countries noted that the agricultural support India provides in this one category exceeds the total support across categories that most of the other countries provide their farmers.
The Committee on Agriculture held a meeting on 23-24 May in Geneva during which each member raised questions about recent agriculture-related announcements or decisions taken by other members. The details of the questions were made public this week.
According to the WTO’s Agreement on Agriculture, member countries are to reduce the support they provide their respective agriculture sectors in a bid to create a level playing field across the world. However, one of the exemptions from these reduction commitments for developing countries is the subsidy provided to low-income and resource-poor farmers in these countries.
It is in this exempt category that India has seen the 50 percent jump in the subsidy it provided, and which drew the questions of the other WTO member countries.
According to India’s submission, its subsidies for low-income farmers includes support for irrigation, fertilisers, and electricity. It further said that, according to the Agricultural Census for 2015-16, 99.43 percent of farm holdings in India are of low-income or resource-poor farmers.
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‘Sharp increase’ in subsidy for poor farmers
“What are the factors behind the 50 percent increase in ‘input subsidies available to low-income or resource-poor producers’ since the marketing year 2021-22,” Japan asked, according to the WTO’s document. “Besides irrigation, fertiliser, and electricity mentioned in the note, are other inputs such as feed and fuel also covered by these subsidies?”
Japan further asked if India would be able to provide the breakdown of the subsidies for each input.
Brazil also noted the “sharp increase in expenditure” on account of subsidies to low-income farmers.
“Taking into account the fact that this sum exceeds the total agriculture support from most [of] the Membership, could India justify this sudden escalation in expenditures in terms of marketing prices of fertilisers, agrochemicals, electricity and eligible number of resource-poor or low-income farmers in the country,” Brazil asked.
The European Union reiterated the questions asked by the other countries but also asked whether this trend of increased support to low-income farmers continued into 2023-24.
Canada, too, asked similar questions but also asked India when it would provide an update on the proportion of low-income farmers based on the Agricultural Census that was launched in July 2022, instead of relying on data from 2015-16.
Food security measures draw questions
The other issue that attracted a number of questions from various countries was how much money India was allocating for its food security, and why this had increased significantly in 2022-23 over the previous year.
According to India’s submission, it spent $33.9 billion ‘public stockholding for food security purposes’ in 2022-23, up 21 percent over the $28 billion it spent the previous year.
“Japan would like to ask India reasons for the increase in the value of public stockholding for food security purposes and domestic food aid, which is approximately 21 percent rise compared to the 2021-22 notification,” Japan’s comment read.
Canada pointed out that India seems to have merged two categories — expenditure on public stockholding, and on domestic food aid — and asked whether India could provide the disaggregated data “as one relates to the
accumulation and holding of stocks and the other, to domestic food aid to sections of the population in need”.
Actions by states further reduce transparency
Canada raised another issue in detail as well, something it said it has raised before — the lack of transparency created by actions of Indian states, which are over and above the steps taken by the central government.
“Canada would like to reiterate concerns previously expressed… regarding the lack of transparency regarding India’s state-level bonuses, which are provided over the announced minimum support prices (MSP),” Canada said.
“Canada understands that despite the MSP being mandated at the federal level, each of India’s 28 states and 8 union territories is responsible for adopting the MSP guidelines through its own Agriculture Produce and Marketing Committee (APMC),” it added.
It said it further understands that regional differences between APMCs are significant, with some states having never legislated an APMC, while others having strong and active APMC regulation.
“Could India confirm if bonuses provided above the MSP in certain states and unions were counted in the final MSP support shown in the statistical appendix (provided by India to the WTO),” Canada asked, adding that if not, India should provide an update on the gathering of this information “that has been requested on many instances and that has yet to be appropriately included in India’s domestic support notifications”.
The European Union, too, asked whether the support to rice producers of 12.1 percent of the value of production that India reported it had provided farmers in 2022-23 was inclusive of the support provided by the state governments.
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seems the indian govt. is caught here… entire money never reached the farmers, but was used in our purposes – election campaigns, payments to the IT cell recruits, for advertisements of the party, helicopter rides, distribution of money during elections to people against vote promises… its a BIG list.. and these countries that are pointing out are as if they don’t know where our govt. put that money and subsidies.. what it did with that money…very innocent