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Source-This post on India’s farm subsidies under WTO Scrutiny is based on the article “India faces WTO pressure on farm subsidies amid protests for minimum support price” published in “The Indian Express” on 15th February 2024.
Why in the News?
Recently, The Cairns Group has claimed that India’s public stockholding (PSH) program is heavily subsidized.
They argue that India’s farm support distorts global food prices and undermines food security in other countries. This increases pressure on India to comply with World Trade organisation (WTO) regulations regarding farm subsidies.
What do the WTO regulations regarding farm subsidies say?
Objective– The WTO regulations on farm subsidies aims to ensure fair competition and prevent trade distortion globally.
a. These regulations impose limits on the types and levels of subsidies that member countries can provide to their agricultural sectors.
Levels of subsidies:
| Green Box | Amber Box | Blue Box |
| 1. It includes subsidies that do not significantly distort trade. 2. They are not specific to particular products and are generally allowed by the WTO. 3. Examples include funding for research, environmental protection, and direct income support for farmers facing difficulties like crop loss or other disasters. | 1. These are the subsidies that distort international trade by promoting excessive production. 2. Examples include, input subsidies such as subsidies on seeds, fertilisers, Minimum Support Price (MSP) etc. 3. WTO limits this subsidy by capping it at 5% for developed countries & 10% for developing countries. | 1. These subsidies are similar to amber box subsidies, but they aim to restrict production. 2. Currently, only a few countries like Norway and Iceland utilize these subsidies. 3. The WTO does not impose any limits on these subsidies. |
What is Cairns group?
1. About– It is a coalition of agricultural exporting countries that advocate for agricultural trade liberalization.
2. Established– It was established in 1986 and is named after Cairns, Australia, where the first meeting took place.
3. Member Countries– The group consists of 19 member countries, primarily from the Asia-Pacific region and Latin America, including Australia, Canada, Brazil, and Thailand, among others.
4. Objective– The Cairns Group aims to promote fair and open agricultural trade by advocating for the reduction of trade barriers, subsidies, and protectionist measures that distort global agricultural markets.
UPSC Syllabus- Indian Economy/International Organisations
