The farm support plans announced by India and the United States have created a lot of noise mainly among the developed nations with surplus agriculture produce. These are under the scrutiny by the World Trade Organization members in WTO’s quarterly agriculture committee meeting on June 25-26. Specifically the European Union and Australia has asked India to explain the Modi’s proposal to spend Rs 25 lakh crore on agriculture and rural development and doubling farmers’ incomes by 2022 as part of Rs 100 lakh crore, five-year infrastructure development plan. Even the US is out asking questions about India’s 5% export subsidy for non-Basmati rice as well as increasing purchase of wheat at higher minimum support prices by the Indian Government even when India has record wheat stockpile.
It seems that the USA, Australia, European Union and other nations are considering the purposed ‘transport and marketing assistance’ for agriculture as an export subsidy and these countries are of view that after the implementation of this plan, India will breach the allowed ‘product specific’ ceiling of 5% of the value of production. These countries think that India’s plan is a trade-distorting subsidy with goal to dump its surplus stock in foreign markets. They fear that it will have negative impact on competitors in international market. So they want every detail of this purposed plan as the WTO has strict rules about the size and nature of payments.
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