View of US
The U.S. had filed a counter-notification at the WTO Committee on Agriculture on May 4, alleging that “based on U.S. calculations, it appears that India has substantially under-reported its market price support (MPS) for wheat and rice”, according to a statement issued by the U.S. Department of Agriculture. According to the U.S. calculations, the value of India’s MPS for rice that year was more than Rs.1.7 lakh crore, which would be 76.9% of the total value of production.
View of India
Indian diplomatic sources told that the U.S. calculations were based on wrong assumptions. They added that India would officially respond at the WTO’s Committee on Agriculture meeting in June.
India notified the WTO that its MPS for rice in 2013-14 was just over Rs. 12,001 crore. That amounts to 5.45% of the total value of production.
WTO permits maximum Market price support cut-off of 10% on total market value of the produce.
Issue raised by US
One of the issues raised by the U.S. is that India’s notification “only reflect the national minimum support prices and do not include all state bonuses or other incentives that further increase the MSP provided to farmers.”
(Adapted from The Hindu)