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India’s Sugar Woes at the World Trade Organization
Policies related to India’s sugar sector are facing adjudication in a case brought to the World Trade Organization. It is alleged that India provides market price support on account of fair and remunerative price and other measures to the sugar sector in excess of maximum applicable permissible limit under the Agreement on Agriculture. Without these policies, the sugar sector, employing over 50 million farmers, would face a tremendous challenge. Irrespective of the legal outcome and given the minuscule policy space available under the amber box, this paper finds the provisions of the blue box feasible and worthwhile to explore for the distressed sugar sector. Further, it highlights the asymmetries and imbalances in the AoA that adversely impact the policy space of developing members, including India.
All views expressed here are personal.
Of late, developing country members at the World Trade Organization (WTO) have been facing increased global scrutiny of their agricultural policies, especially those related to product-specific support. In 2016, the United States (US) initiated a dispute against China, claiming that it had breached its commitments under the Agreement on Agriculture (AoA) by providing more than $100 billion in support to wheat, rice, and corn (USTR 2016). In 2019, Australia, Brazil, and Guatemala challenged the sugar and sugar cane policies of India at the WTO, claiming that the product-specific support to the sector was far beyond the applicable permissible limit of 10% of its value of production (VoP) (WTO 2018a).
These instances highlight the challenges confronting many developing country members, such as China, India, Egypt, Jordan, Kenya, Pakistan, Turkey, Zimbabwe, etc, in implementing domestic support policies under the restrictive provisions of the AoA (Sharma 2016). The problems for most developing country members are not only limited to farm distress but also include inefficient markets, volatility in agricultural prices, food insecurity, etc. In light of these challenges, governments in developing countries are compelled to implement various schemes, including price interventions, consonant with their agricultural and socio-economic conditions. Such interventions are not only important for agricultural development but also in achieving the United Nations’ Sustainable Development Goals.
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