Two new papers by the International Food Policy Research Institute (IFPRI) reveal the results of shadow WTO notifications undertaken on China and India’s domestic subsidy policies.

India’s first official notification for green box support amounted to US$ 2 billion. The IFPRI report’s shadow notification, using the author’s understanding of India’s methodology for calculating domestic support, shows green box support growing to nearly US$ 8 billion by 2005. The report also shows that input subsidies for low-income farmers declined during the period 1998-2002, amounting to about US$ 4.5 billion in 2005.

The report’s author, Munisamy Gopinath, expects certain government support in the agricultural sector to grow in the short term. “With India’s general elections expected in early 2009, the immediate future includes popular policies such as credit subsidies and significant growth in minimum support prices,” writes Ms Gopinath. However, the author does not predict that India will exceed the limits for non-product specific Aggregate Measure of Support — a measure of the monetary value of support to the sector—which India has proposed as part of the Doha Round agreement (10% of the value of production).

The report on China applies a shadow notification using standard WTO subsidy methods and finds that China’s domestic support during the period 1996-2005 was well below the limits agreed to when it acceded to the WTO in 2001. China, which can provide trade-distorting domestic support (amber box) of up to 8.5% of the value of production, appears to have “substantial room to expand its amber box subsidy measures through the de minimis provision.”

To download “China: Shadow WTO Agricultural Domestic Support Notifications”, see: http://www.ifpri.org/pubs/dp/ifpridp00793.asp

To download “India: Shadow WTO Agricultural Domestic Support Notifications”, see: http://www.ifpri.org/pubs/dp/ifpridp00792.asp