China Joins India At WTO, Seeks Abolition Of Farm Subsidies Provided By US, Canada And EU

China and India have joined hands in seeking cuts on farm subsidies given by developed nations like US, Canada and EU, The Economic Times has reported. China and India have demanded these nations do away with the trade distorting subsidies given to farmers producing cotton, wool and tobacco among others.

Under WTO norms, the Aggregate Measure Of Support (AMS) or farm subsidies is capped at 5 per cent for developed nations. But these nations have exceeded the limit in many cases.“The product-specific support has to be ultimately brought down to zero but till the time it is there, it should be limited to 5 per cent,” an official aware of the developments told ET.

These subsidies make agricultural products of developing nations uncompetitive in the global market.

The US and EU, notably, have given subsidies exceeding 50 per cent of the value of production for their agricultural products.

Subsidies given by US for crops are: 82 per cent for rice, 66 per cent for sugar, 57 per cent for dry peas, 61 per cent on canola, 65 per cent on sunflower, 74 per cent on cotton and 215 per cent for wool.

The EU, meanwhile, provides 66 per cent subsidies for rice , 71 per cent for butter, 68 per cent on apples, 86 per cent on cucumber, 120 per cent on white sugar, 155 per cent for tobacco and 167 per cent for silkworms. Canada’s support to farmers is thrice the value of produce in 2009.

India and China have also argued that developing nations are restricted from providing product specific subsidies exceeding the stipulated limits (10 per cent), but developed nations are given significant flexibility in this regard.