India & US protest farm subsidy breach

NEW DELHI: 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, or WTO, brokered multilateral trading agreement, putting pressure on errant countries to lower these trade distorting sops.

The developments come amid concerns over growing trade distortions measures — such as export curbs, high tariffs and incentives to local farmers — by countries to ensure food security for their people.

"Four countries have reported doling out higher food subsidies in 2008 than what they had committed," said a WTO official.

These four countries are Costa Rica, Poland, Israel and Norway, which have a good export market in some niche farm products. For instance, half of Costa Rica’s exports comprise bananas and coffee.

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

"There is need to raise concerns no doubt as it is a breach of WTO commitments. But we should see the quantum and magnitude as well," pointed out Sachin Chaturvedi , senior fellow, Research and Information System for developing countries.

All the four countries have said that they would bring down their subsidies to committed levels, the WTO official said. The WTO member countries had taken on commitments to keep their total farm subsidies within specific levels at the Uruguay round in 1995.

India had pointed out at a recent agriculture committee meeting of the WTO that Costa Rica's breach was particularly hard to explain as it was itself seeking steep cuts in farm subsidies and tariffs in the ongoing Doha round.