Government Subsidies https://www.wsj.com/articles/india-buried-in-sugar-tries-to
ID: 1165373 • Letter: G
Question
Government Subsidies
https://www.wsj.com/articles/india-buried-in-sugar-tries-to-dig-out-1527591604?mod=djem_jiewr_IB_domainid
The Indian government sets price guarantees for growing sugar but the farmers are only paid when refiners sell the sugar. The price of sugar is currently so low that refiners are hesitant to sell of their huge and growing sugar stockpiles. Refiners are hoarding the sugar and waiting for a better price or better incentives to sell. The Indian government wants to incentivize the refiners to sell the sugar, but if the refiners dump the sugar on the global market at too low a price, India risks sanctions from the WTO.
Provide some information to make presentation on above topic please
Explanation / Answer
* Agricultural prices in India is determined by Commission for Agricultural pricing committee. Although committee supports price for 23 crops but majorly they announce price for four major food crops wheat, rice, sugarcane, cotton. Due to assured prices by government farmers produce sugarcane . Due to excess production of sugarcane production of sugar increases. Due to huge production of sugar prices are very low. Thus sugar Mill owners are reluctant to sell at such a low prices . Now production is more than domestic consumption and hence India will dump it's excess production in international market. This will invite sanction from WTO.
WTO has asked the developed countries to remove agrictural subsidies immidiately and urged developing countries like India and China by 2022 . Looking at food security concerns of developing countries WTO has given some time and framework to remove subsidy and open trade in agriculure.
** This is rough idea from where you can start. You can look for more details from ministry of agriculture.
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