The Australian Government has said it’s “disappointed” that the Indian government hasn’t addressed its “deeply held“ concerns over the subsidies given to sugarcane farmers in India that are allegedly driving down the global sugar prices.
Minister for Trade and Investment, Simon Birmingham said the use of domestic subsidies by India had contributed to a significant downturn in world sugar prices and that it’s hurting the Australian sugarcane producers.
"We will support the right of our sugar industry to compete on equal terms and will utilise well established global trading rules to defend the interests of our farmers," Mr Birmingham said.
"Whilst we support efforts by countries to develop their agricultural industries, these efforts need to be consistent with their WTO obligations and applied in a manner that doesn't distort global trade.”
Mr Birmingham said the Indian government has not addressed Australia’s concerns over the matter despite it being raised on numerous occasions.
"We are disappointed our concerns haven't been addressed and now see little choice other than to ramp up our efforts to stand up for the rights of our cane farmers and sugar millers,” he said.
In September this year, Mr Birmingham told SBS that he was “deeply concerned” about the global sugar prices that he said were at a decade’s low due to subsidies introduced by India and Pakistan.
In the same month, India approved an export of 5 million metric ton with subsidies for the 2018-19 season. India announced a production subsidy along with a three-stage transportation subsidy that works out to be $150(US) per metric ton.
A political sweetener
Sugar and politics are inextricably intertwined in India.
India’s union government announces the price of sugarcane that sugar mills must pay the farmers for their produce. However, the state of Uttar Pradesh – the largest producer of cane in India usually raises the price in order to placate a large number of cane growers.
As a result, India’s sugarcane production this season is expected to cross 30 million tonnes causing a glut.
With India’s general election due in May next year, the Indian Government isn’t expected to slash these subsidies or do any such thing that could miff the highly influential political lobby of nearly 50 million sugarcane farmers.
Australia’s Minister for Agriculture and Water Resources David Littleproud said distortions in global sugar price created by India’s subsidies have affected 4,000 cane farms and 24 sugar mills in Australia.
"I want our farmers to be fairly rewarded for their effort," Mr Littleproud said.
"We're in there fighting for our sugar farmers. They deserve someone in their corner who isn't afraid to use the options available to them.”
Australia is now gearing up for a faceoff with India at the World Trade Organisation’s Committee of Agriculture meeting later this month when the issue will be raised with India and other WTO members.
“We continue to be willing to engage in any and all discussions that may resolve this issue,” Senator Birmingham said.
However, he made clear that despite the bitterness over the sweet commodity, Australia’s relationship with India is robust.
"Despite our concerns on sugar subsidies, our relationship with India is far stronger than this one particular issue and I'm confident Australia and India will build on their already vibrant economic and strategic relationship well into the future," he said.
