Context

• During the WTO Agriculture Committee meeting in Geneva on 23-24 May, a group of WTO member countries urged India to submit timely notification on sugar subsidies to the WTO.

Key Points

• Countries like Brazil, Canada, Costa Rica, Paraguay, New Zealand, the European Union and Guatemala are also major sugar exporters like India and they allege that India's support measures (subsidies given to farmers) distort global sugar trade.
• India in response has stated that the Central and State Governments of India neither paid for the sugarcane from the farmers nor procured the sugarcane from them, as all the procurement was done by private sugar mills, hence, this information is not available in the notification of domestic support.
• It is noteworthy that this discussion is important because in 2022, India has appealed against a decision of the trade dispute settlement panel of the World Trade Organization (WTO), which had ruled that the country's domestic support measures for sugar and sugarcane are in violation of global trade. 
• In its appeal, India has said the WTO dispute panel's decision has made some "erroneous" findings about sugarcane growers and domestic schemes to support exports.
•  As a result, the findings of the panel are completely unacceptable.
• Apart from this, America and Australia have also presented a joint counter notification regarding India's sugar subsidy.
•   According to their study, in the four-year period from 2018-19 to 2021-22, India has provided market price support on sugarcane in excess of the limit prescribed in the agriculture agreement (10 percent of the total value of sugarcane).
• He also claimed that India had failed to report any of these subsidies in its previous notifications since 1995. 
• Countries like Brazil, Canada, Costa Rica, Paraguay, New Zealand, European Union and Guatemala expressed support for the said notification. 
• India has refused to accept the methodology used in the 2018 dispute as a basis for discussion.

Important Facts For Exam

World Trade Organization (WTO)

• WTO was adopted in place of the General Agreement on Tariffs and Trade (GATT) concluded in 1947.
• Start of work: 1 January 1995
• Headquarters: Geneva, Switzerland
• Members: 164 countries and European Union
• India became a founding member of GATT and WTO: Year 1947

Current status of sugar industry in India

• The sugar industry is the second largest agro-based industry in India after cotton.

Geographical conditions for the growth of sugarcane

• Temperature: Between 21-27 °C with hot and humid climate.
• Rainfall: About 75-100 cm.
• Soil Type: Deep rich loamy soil.
• Top Sugarcane Producing States: Maharashtra > Uttar Pradesh > Karnataka.
• Distribution: Sugar industries are broadly located in two major areas of production - Uttar Pradesh, Bihar, Haryana and Punjab in the north and Maharashtra, Karnataka, Tamil Nadu and Andhra Pradesh in the south.
• South India has a tropical climate which is suitable for higher sucrose production with higher yields per unit area compared to North India.