Brazil, Columbia, Australia and the European Union raised the issue of the incentive provided by the Government of India to the sugar sector in the meetings of the Committee on Agriculture of the World Trade Organization (WTO) held in March and June 2014. These countries sought information on various aspects of the scheme.

The scheme provides an incentive on marketing and promotion services of raw sugar production which will be reviewed before the commencement of the next sugar season 2014-15.

India has been questioned in the WTO’s Committee on Agriculture but no penal action has been initiated. India explained in the WTO that the aim of the government intervention is to facilitate payments of outstanding arrears to farmers by the sugar mills and product diversification by incentivizing raw sugar production.

The information was given by the Minister of State (Independent Charge) in the Ministry of Commerce & Industry Smt. Nirmala Sitharaman in Lok Sabha.

Agricultural subsidy inquiry triggers review of marketing incentive for raw sugar to aid farmer arrears and diversification. An international trade inquiry questioned an Indian incentive tied to marketing and promotion of raw sugar production; the scheme, subject to review before the next sugar season, was explained as aimed at facilitating payment of outstanding arrears to farmers and promoting product diversification, and no punitive measures had been initiated when information was supplied.