Located in Asia, India is the second largest rice and wheat producer in the world. The Asian nation enjoys bumper rice and wheat harvest every year and this explains why India is the largest Rice Exporter globally.
Talking of wheat, India as a wheat exporter accounts for a meager 1% of the total global wheat trade as most of the wheat produced is domestically consumed. However, Indian wheat gained significance last year in the aftermath of the Russia-Ukraine war and the Asian nation exported volumes of wheat to meet global demand.
India’s record shipments of rice and wheat have been criticized by some of the world’s agricultural powerhouses and they have accused the Asian nation of providing subsidies beyond its commitment which has in turn motivated Indian farmers to plant more crops and has resulted in a fall in global prices.
Complaints Against India’s Farm Subsidies
On the 6th of April, 2023, some of the world’s agriculture powerhouses including Australia, Canada, Paraguay, Thailand, Ukraine, and the United States accused India of violating world trade rules by providing exorbitant subsidies to its rice and wheat farmers.
Despite agreeing to limit its market support price to 10% of the value of the crops, subsidies for wheat were 81% while that for rice in 2020/21 was 94% according to the counter-notification.
Sen. John Boozman of Arkansas said that this is a far cry from the level playing field our farmers were promised and deserve and is the reason why we need to push forward with a formal complaint against India with the WTO.
As per the counter-notification filed by some of the world’s agriculture powerhouses, India was accused of providing significant market price support, both in absolute value and percentage value for promoting domestic production of rice and wheat.
For the seven-year period mentioned in the document, India’s subsidy levels rose steadily from the 2014/15 marketing year through 2020/21 with rice subsidies totaling 3.18 trillion rupees and wheat subsidies totaling 1.7 trillion rupees.
The six complaining countries also cited that they used data publicly available to arrive at these figures of financial support and assistance provided for India’s rice and wheat growers.
The Bottom Line
India is the second largest rice and wheat producer in the world and the Asian nation ranks first in terms of rice exports. However, India as a wheat exporter accounts for a meager 1% of the global wheat trade. Despite this, India’s wheat exports surged to record volumes in the event of the Russian invasion of Ukraine.
India’s growing shipments of rice and wheat have come under scrutiny and on Thursday, agriculture powerhouses including Australia, Canada, Paraguay, Thailand, Ukraine, and the United States have criticized India’s lavish subsidies to domestic rice and wheat farmers that have hurt farmers throughout the world. This is the latest in years of complaints against India’s farm subsidies.
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