India appeals against WTO order on Sugar

  Feb 13, 2022

India appeals against WTO order on Sugar

Q Why is it in News ?

A India has appealed against a ruling of the World Trade Organisation’s (WTO) trade dispute settlement panel on domestic sugar subsidies, stating that the panel had committed “certain errors of law” in its report.

Q What is the case?


Q What was the complaint against India?

A Australia, Brazil, and Guatemala said India’s domestic support and export subsidy measures appeared to be inconsistent with various articles against WTO’s:

  1. Agreement on Agriculture
  2. Agreement on Subsidies and Countervailing Measures (SCM)
  3. Article XVI (which concerns subsidies) of the General Agreement on Trade and Tariffs (GATT)

Q What is India’s reply to WTO panel ?


Q Who determines Sugarcane prices?

A Sugarcane prices are determined by the Centre as well as States.

  1. The Centre announces Fair and Remunerative Prices which are determined on the recommendation of the Commission for Agricultural Costs and Prices (CACP) and are announced by the Cabinet Committee on Economic Affairs, which is chaired by Prime Minister.
  2. The State Advised Prices (SAP) are announced by key sugarcane producing states which are generally higher than FRP.

Minimum Selling Price (MSP) for Sugar

Q What is Basis of price determination

Q What is Fair and Remunerative Prices?

Q What are Factors considered for Fair and Remunerative Prices ?

a) cost of production of sugarcane;

b) return to the growers from alternative crops and the general trend of prices of agricultural commodities;

c) availability of sugar to consumers at a fair price;

d) price at which sugar produced from sugarcane is sold by sugar producers;

e) recovery of sugar from sugarcane;

f) the realization made from the sale of by-products viz. molasses, bagasse, and press mud or their imputed value;

g) reasonable margins for the growers of sugarcane on account of risk and profits.