India giving rice and wheat production vast support, U.S. tells WTO

By Tom Miles

GENEVA (Reuters) - India is supporting its rice and wheat farmers with payments that are far higher than the amounts allowed by the World Trade Organization, the United States said in a statement published by the WTO on Wednesday.

"It appears that India provides market price support (MPS) for wheat and rice vastly in excess of what it has reported to the WTO," the U.S. statement said.

"India's apparent MPS for wheat appears to have been over 60 percent of the value of production in each of the last four years for which India has notified data. Its apparent MPS for rice appears to have been over 70 percent."

Anything over 10 percent would break WTO rules, it added.

India has made reform of agricultural subsidies a major negotiating issue at the WTO in the past five years.

It has won preliminary WTO backing for a system of public stockholding of farm produce for food security purposes, but the United States and others have been wary of its plans, warning that payments which encourage production could lead to oversupply and potentially a spillover onto world markets.

In its analysis, the United States looked at India's payments for the four most recent years that it had notified to the WTO, from 2010/11 to 2013/14.

The U.S. statement said that India was the world's second or third largest agricultural producer, while its agricultural exports increased by 22 percent during the years in question, as it moved from being the 10th to the seventh-largest exporter.

It was the world's top rice exporter, with 20 percent of its crop covering a third of the world export market.

In 2013/14, India had notified MPS for rice of 120 billion rupees ($1.78 billion), equivalent to 5.45 percent of the value of rice production. By the U.S. calculation, the true figure was over 1.780 trillion rupees ($26.43 billion), or 76.9 percent of production.

Payments for wheat in the same year were officially a negative 49 billion Indian rupees, whereas the U.S. analysis put them at 965 billion Indian rupees, or 65.3 percent of the value of production.

The United States has campaigned for WTO members to be more transparent about their trade policies, both to comply with WTO rules and to guard against hidden protectionism. It said it wanted to discuss its findings and their significance for world markets.

($1 = 67.3450 Indian rupees)

(Reporting by Tom Miles, Editing by Peter Graff, William Maclean)