A Bitter Pill to Swallow: India’s sugar sector under siege at the WTO

Abstract

Indian agriculture is fraught with policies that are presently facing the gavel at the WTO. Sugarcane related policies, in particular, are being alleged to constitute domestic support beyond the permissible limit and for this reason, have been challenged by Australia, Brazil and Guatemala. The ground reality, however, contrasts this narrative. With rising cane arrears and prevailing farm distress, the sugarcane sector faces an uphill battle on domestic and international fronts. The skewed provisions of the Agreement on Agriculture and the commitments under them have added to the grievance of this sensitive sector, along with the application of outdated and biased rules pertaining to external reference prices and aggregate measurement of support entitlements. Through this study, the authors have attempted to address this purported issue of excessive support, by utilizing the alternative provisions under the Agreement on Agriculture to notify domestic support to the sugarcane sector. In contrast to the counter-notification, the results clearly show that domestic support to sugarcane sector is within the permissible limit established by the WTO.