India has a chance to tell the World Trade Organisation to not set up a panel requested by Brazil on India's subsidies to sugarcane farmers, said Abinash Verma, Indian Sugar Mills Association.
Brazil has alleged that in recent years, India has massively increased the level of domestic support under its support regime for sugarcane and sugar.
“Brazil respectfully requests that the dispute settlement body establish a panel,” according to a communication submitted by the South American country to the Geneva-based WTO.
Verma said, "Even if a dispute panel is set up, it will talk about the current years or previous years subsidies as well as domestic support whether those are WTO compatible or not.”
There are provisions under WTO rules which allow the developing countries to support its industry through domestic support for its sugarcane farmers or the farmers in general as well as to support exports through various WTO compatible or WTO approved provisions, pointed out Verma.
Verma said, “The process in the WTO is to be followed and the process is that if there is a country which has some grievances or some issues with any subsidies or any domestic support they first go in for what is called is the round of consultation. In this, the two countries sit across the table and discuss polices and try and explain to each other. If the complaining country is not satisfied with those answers they request for a formation of dispute panel in which both the countries will get a chance to explain their point of view.”
Sugar prices are expected to rise in the next season, which starts in October, as experts believe there will be a deficit in the global markets of around 4 million tonnes, mainly due to a drop in production from India, Thailand and European Union, said Verma.
"If there is a deficit in the global market of 4 million from a surplus of 2 million in the current season there is a reason to believe that the global prices should move up from whatever it is today,” he added.