The world’s largest sugar producing nation, Brazil, has joined Australia to lodge a formal complaint against India with the World Trade Organisation (WTO).
Brazil and Australia launched formal dispute action with the WTO overnight, claiming subsidies paid to farmers in India have led to a sugar glut and depressed global prices.
“That’s hurting canegrowers and sugar millers whether they’re in Australia, Brazil, or any other country in the world,” Australian Trade Minister Simon Birmingham said.
Mr Birmingham said Australia was “left with no other choice but to initiate formal WTO dispute action, together with Brazil”.
He said despite several representations to India about Australia’s concerns “sadly, they continue to apply subsidies”.
“Last year we saw around $1 billion of additional new subsidies to Indian sugar farmers and we understand that there are many pressures on the Indian sugar farming industry, and we understand their desire to support their farmers,” Mr Birmingham said.
“But these WTO inconsistent practices are really hurting our farmers and those elsewhere around the world, and that is why we are going down this path.”
Following that increase in subsidies the global sugar price hit a 10-year low.
Canegrowers chairman Paul Schembri said it now cost Australian canegrowers more to produce sugar than they were paid for it.
He thanked the Australian Government for its intervention, describing the WTO dispute as “a rare and significant escalation”.
“Australian farmers can’t continue to sustain these low sugar prices,” Mr Schembri said.
“Other ways need to be found to support the wellbeing of India’s sugarcane growers so that the global market can function efficiently and reward unsubsidised and efficient sugar producers including growers and millers in Australia.”
India is expected to produce more than 30 million tonnes of sugar in 2018–19, up from 20 million tonnes in 2016–17.
The Australian Government first lodged a counter-notification with the WTO, in relation to India’s sugar practices, last November.