No breach of farm subsidy limits, India tells WTO

NEW DELHI: India has informed the World Trade Organization ( WTO) that it did not breach the permissible farm subsidy limit between 2011-12 and 2013-14. India recently submitted its farm subsidy details for these three years to the multilateral body.

Putting to rest doubts of developed countries that India's farm subsidies have been on the rise, New Delhi told the WTO that input subsidies that include those for fertilisers, irrigation and electricity fell to $22.8 billion in FY2014 compared with $29.1billion in FY 2011.

These are part of the 'green box' or non-trade distorting subsidies that are allowed without limits for countries such as India that has millions of poor farmers.

India doled out $18.3 billion in FY 2014 'green box' subsidies, significantly lower than $24.5 billion in FY 2011.

Put together with the $22.8 billion of input subsidies especially for developing countries, the total outgo was $41.1 billion.


According to the agricultural census for 2000-2001, 98.97% of farm holdings were of low-income or resource poor farmers. The percentage increased to 99.15, according to the 2005-2006 agricultural census.

India provides domestic support to agricultural producers mainly through operations of the agriculture ministry.

All support is covered by the domestic support categories that are exempt from reduction commitments under the WTO's Agreement on Agriculture.

The United States' farm subsidies in 2009 were to the tune of $101 billion.

"This shows that other countries’ concerns were misplaced because our subsidies have declined when theirs have risen, especially those where there is no limit on the increase," said an expert on WTO matters, who did not want to be named.

The BJP-led NDA government has toughened its stance on food subsidies ever since it came to power in 2014.

The government indicated in the notification to WTO that another $14.7 billion was spent on public stockholding for food security purposes, another 'green box' complaint element that was $13.8 billion in FY 2011.

The 16-page document showed India spending consistently lesser on research between 2011-12 and 2013-14 but increasingly more on advisory services.

While marketing and promotion expenditure jumped, spending on infrastructure services declined from $2.1 billion to $1.4 billion in FY2014.

The notification also mentioned the prices the government paid farmers for crops such as rice, wheat, coarse cereals and cotton in each year.

The level of price subsidy was within the allowed limit of 10% of the market value of total production, according to the filing.