‘Removing cotton export subsidies to help developing nations’

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Elimination of export subsidies on cotton by developed nations of WTO would help domestic growers and also prevent dumping of the subsidised natural fibre in India, government said today.

The WTO’s Nairobi Ministerial decision on elimination of export subsidies on cotton will be good for Indian exportsas it will create a level playing field for domestic farmers, who were not entitled to it but other developed countries were providing the same, the commerce ministry said in a statement.

“Thus India’s push has helped in elimination of cotton export subsidies by developed countries. This will help Indian cotton growers in competing with other growers as well as prevent dumping of subsidised cotton in India,” it said.

The government is committed to the welfare of cotton farmers and has been taking every step to protect them which includes procurement through Cotton Corporation ofIndia at minimum support prices, it added.

Cotton is an important crop and very high level of subsidies in developed countries have been a cause of worry for developing countries as they adversely affect cotton growers in the poorest nations, it added.

The WTO’s Agreement on Agriculture (AoA) permits export subsidies on agriculture subject to the limits set-out in members’ schedules of commitments.

Export subsidies can still be used by the World Trade Organization (WTO) members, but only where they used them during the base period (1986-1988).

“As India did not have any export subsidies during the base period, it was not entitled to any export subsidies except subsidies aimed at reducing the cost of marketing including internal and external transport as well as handling and processing costs…Provided that these are not applied in a manner that would circumvent export subsidy reduction commitments,” the statement said.

It said that this exemption is one of the special and differential treatment provisions of the agreement and was available during the implementation period of the Uruguay Round of the WTO.

“The implementation period of the agreement has ended and, therefore, some of the members have been arguing that the special and differential treatment provisions under…(an article) of the AOA are no longer available,” it said.

The Nairobi Ministerial decision on cotton and export competition resulted in a commitment by developed countries to immediately eliminate their export subsidies on the date of adoption of the decision – December 19, 2015 and developing countries by January 1, 2017.

The issue of addressing cotton subsidies was reiterated in almost all Ministerial Conferences of the WTO.

“India is not a major user of the export subsidies and as per India’s notifications to the WTO, India has not given any export subsidy for cotton between the year 2006-07 and 2009-10,” it said.

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