The Commonwealth Government has moved to level the global playing field for Australian cane growers – taking action through the WTO over India’s sugar subsidies.
Trade Minister Simon Birmingham announced today that the Government has lodged a ‘Counter-Notification Notice’ with the World Trade Organisation (WTO), calling for India to bring its sugar subsidies back in line with WTO standards.
WTO rules allow market price supports of up to 10% of the total value of production, however Indian payments in recent years have been above 90%, even hitting 99.8% in 2015-16.
By taking the issue to the WTO, Australia has sent a clear message to India that its sugar subsidies are over the top and must stop. WTO rules allow market price supports of up to 10% of the total value of production. Indian payments hit 99.8% in 2015-16.@CANEGROWERS @dfat
— Warren Males (@MalesWarren) November 15, 2018
Minister Birmingham said the use of domestic subsidies by India had contributed to a significant downturn in world sugar prices that was impacting our local sugar industry.
“We will support the right of our sugar industry to compete on equal terms and will utilise well established global trading rules to defend the interests of our farmers,” Minister Birmingham said.
Whilst we support efforts by countries to develop their agricultural industries, these efforts need to be consistent with their WTO obligations and applied in a manner that doesn’t distort global trade.
Following on from the notice, the Government will now enter formal negotiations with India and other WTO members at the upcoming WTO Committee of Agriculture meeting later this month (on 26-27 November).
CANEGROWERS Chairman Paul Schembri says that by lodging a Counter-Notification Notice with the WTO, Australia is flagging that this is a serious issue of significant concern at the highest global level
“We applaud the Australian Government for drafting the Notice and providing the opportunity for other countries to express their concern also by adding their names to it, further drawing global attention to this serious world sugar industry situation.
“India’s ongoing and blatant disregard of the rules is having serious implications for the world sugar market and the profitability of Australian growers who are totally exposed to the global sugar price,” Mr Schembri said.
We congratulate the Aust Govt for taking a lead role in ramping up global pressure on India to bring its #sugar subsidies back within World Trade Organisation rules. The action takes the very real difficulties of Aust farmers into an international forumhttps://t.co/LmbGD1WXkD
— CANEGROWERS (@CANEGROWERS) November 15, 2018
These sentiments have been echoed by the National Farmers’ Federation, which has applauded the Government’s move.
“For too long the Indian Government has been subsidising their nation’s sugar growers, to a level over and above that permitted by global trading rules agreed to by members of the WTO.
“Today, the Government has sent a clear message – enough is enough, we won’t stand by and continue to see markets distorted.”
80 per cent of Australian sugar is exported and Australian farmers are amongst the least subsidised in the world – meaning they are particularly vulnerable to unfair distortions caused by subsidies in overseas markets.