Dec 16, 2021
WASHINGTON, DC – Earlier today, 18 U.S. Senators sent a letter led by Senator John Boozman (R-AR) to U.S. Trade Representative Katherine Tai and U.S. Secretary of Agriculture Tom Vilsack expressing support for a dispute settlement case at the World Trade Organization (WTO) against India’s domestic supports for rice and wheat production.
The frustration among American farmers and policymakers with India’s subsidy programs is growing.
“American rice and wheat producers are operating at a clear disadvantage compared to their competitors, primarily from India, where the government is subsidizing more than half of the value of production for rice and wheat, instead of the 10 percent allowable under [WTO] rules,” the letter reads.
While producers around the world are being financially impacted now by the shortage of fertilizer and supply chain delays, producers in India won’t feel a thing. The Indian government has announced that they will increase subsidies to fertilizer companies this year, for the first time exceeding $20 billion in support. This will ensure that Indian rice and wheat exports can continue to undercut the rest of the world as they insulate themselves from fluctuations in input costs.
The letter goes on to ask administration officials to “…swiftly initiate the WTO litigation process through a request for consultations.”
“We commend Senator Boozman for leading this letter and for the impressive showing of Senators that support our cause, including my home state Senators Cassidy and Kennedy,” said Bobby Hanks, Louisiana rice miller and chair of USA Rice. “Momentum is building not just here in the U.S., but in all of the markets impacted by trade distortion stemming from India.”
Hanks continued: “India is a major part of the world economy, but that doesn’t give them a pass to skirt around the rules that they agreed to when joining the WTO. It also means they don’t get to hold all of the WTO reforms on the table hostage until they secure permanent public stockholding allowances. This selfish behavior is not in the spirit of the WTO and as a result they’ll be left alone on an island.”
Earlier this week, a WTO dispute settlement panel ruled against India following significant over-subsidization of their sugar industry in a case taken by Australia, Brazil, and Guatemala.