India’s cotton subsidies have come under scrutiny at the World Trade Organization (WTO), with Australia demanding India to provide all relevant data on the value of cotton production to confirm that de-minimis limits (subsidy limit fixed at 10 per cent of production value) were not being breached and also explain why there was a variation in the figure of eligible production (cotton eligible for MSP).
“India affirmed that its cotton support has not exceeded its de minimis spending limit,” said a Geneva-based official.
On the issue of support for cotton, Australia noted that from 2017-18 to 2019-20, eligible production under the MSP programme for cotton in India increased from 0.07 million tonnes (mt) to 1.79 mt. India’s support for cotton thus increased steeply from US $ 14.83 million to US $ 184.83 million, it pointed out, adding that the applied administered price also increased by US $ 270 per tonne.
It is being said that US and Australia have been insisting that the value of price support should be based on the entire crop as technically it was all eligible for support.
However, India’s argument is that only the amount that was procured mattered as price support was extended only to that portion. This needs to be thrashed out at the WTO as it could lead to more trouble for India in the future.
