USW Director of Trade Policy Peter Laudeman (left) chats with NAWG Vice President Of Policy And Communications Jake Westlin during the recent NAFB "Washington Watch" event in the nation's capital. Laudeman is currently in Australia to engage grain industry stakeholders in that country and explore ongoing global issues involving trade, plant breeding technologies and World Trade Organization (WTO) commitments.

USW Director of Trade Policy Peter Laudeman (left) chats with NAWG Vice President of Policy and Communications Jake Westlin during the recent “Washington Watch” event in the nation’s capital. Laudeman is currently in Australia to engage grain industry stakeholders in that country and explore ongoing global issues involving trade, plant breeding technologies and World Trade Organization (WTO) commitments.

U.S. Wheat Associates (USW) Director of Trade Policy Peter Laudeman is in Australia this week to engage grain industry stakeholders in that country and explore ongoing global issues involving trade, plant breeding technologies and World Trade Organization (WTO) commitments.

While a major competitor for U.S. wheat, Australia presents many opportunities for collaboration on policy initiatives that mutually impact both U.S. and Australian producers.

Laudeman will interact with researchers, government regulators, producer organizations, and private sector plant breeding and grain handling companies. His discussions will primarily be focused on the regulatory environment guiding plant breeding technologies, including transgenic and gene edited wheat. Both the U.S. and Australia regulators are reviewing applications to deregulate HB4 wheat produced by Argentinian company Bioceres.

HB4 wheat, a drought-tolerant transgenic wheat, received approval for commercialization and cultivation from Brazil in early March. Brazil joined Argentina, which granted commercialization approval to the genetically modified (GM) wheat in 2022. HB4 wheat is also approved for food and feed use in the U.S., Australia, Colombia, New Zealand, South Africa, Nigeria and Indonesia.

Growing global demand for wheat combined with persistent drought conditions that hamper production is leading the push for greater acceptance of new plant breeding technologies. Bioceres said HB4 drought-tolerance technology has been shown to increase wheat yields by an average of 20% in water-limited conditions.

USW and the National Association of Wheat Growers (NAWG) are guided by jointly approved “Wheat Industry Principles for Biotechnology Commercialization,” which lay out specific steps expected from plant breeding companies if they wish to commercialize transgenic wheat in the U.S.

India’s oversubsidization of wheat and rice is another topic Laudeman will visit while in Australia, which has been a partner with the U.S. in holding other trading partners accountable to their WTO commitments. Australia recently joined WTO counternotification filed by the U.S. against India.


Consumers and suppliers both appreciate uniformity, the ability to purchase a reliable product that is available when needed. Customers of U.S. wheat know that dependable people grow and supply reliable wheat, which marks the difference between the U.S. wheat market and some competing suppliers.

Freedom to Trade

Free trade has been upheld in U.S. commerce since the country’s founding. The Export Clause, in Article I, Section 9, Clause 5 of the U.S. Constitution, states, “No Tax or Duty shall be laid on Articles exported from any State.” The framers of the constitution, eager to throw off the history of colonial rule, made it a policy that goods from the U.S. would be available to markets worldwide, and no elected official would tell them otherwise.

However, farmers have fought for uninhibited trade.

When the Soviet Union invaded Afghanistan in 1980, President Carter cut off U.S. grain exports to the Soviets. In the aftermath of the grain embargo, more stringent laws such as the export sales reporting and contract sanctity law were passed that doubled down on the freedom of commerce.

Protectionism Rising

Despite the sincere efforts by the World Trade Organization (WTO) to keep international markets open, some countries remain quick to block exports when markets become uncertain. Covid-19 and the global shutdowns that followed showed a pattern of export bans from major commodity producers. Russia’s recent invasion of Ukraine has also had a reverberating effect on the grain markets. Many would-be suppliers have instead banned or restricted the sale of their wheat, creating a supply worry and once again proving that not all markets remain reliable.

When countries implement wheat export bans claiming to protect their domestic market it creates uncertainty and higher prices for buyers. Putin’s war with Ukraine pushed already increasing world wheat prices to spike to more than a decade high in March, and prices remain elevated.

Putin’s war with Ukraine pushed increasing world wheat prices to spike to more than a decade high in March, and prices remain elevated. The latest USDA Supply and Demand Report expects Ukrainian wheat exports to fall by nearly half year-over-year from 19.0 million metric tons (MMT) in 2021/22 to 10.0 MMT in 2022/23. This 9.0 MMT reduction is almost the equivalent of all the wheat Turkey is expected to import in 2022/23. Russia’s unprovoked invasion has interrupted Ukrainian commercial sales and added uncertainty to the market.

India abruptly halted commercial wheat exports on May 13, catching the wheat market off guard. The immediate suspension has moderated somewhat since then. Still, the government’s promise to fulfill export shortages caused by Russia’s invasion of Ukraine was an unexpected and costly blow to the market.

Intervention Expands

Other countries have weighed the use of export-curbing measures. Argentina’s president in May urged its legislature to increase export taxes to protect domestic prices from “surging international prices.” Kazakhstan applied a quota on wheat, including durum, soft wheat, and wheat flour, from April 15 to June 1. Belarus imposed an export ban on grains from late 2021 to early 2022.

And Russia, with a very large wheat crop now expected, has not stopped its protectionist wheat export tax that only increases the cost for buyers. Russia also imposed export bans on countries in the Eurasian Economic Union (EEU), which comprises former Soviet countries. The ban is in place from Mid-March to August 31, 2022.

When countries implement wheat export bans, they often claim to be protecting their domestic market. But the actual effect is higher prices for every buyer. Export bans also create uncertainty. India’s sudden export ban is a prime example.

“We bought wheat from traders and moved it to ports,” said a wheat trader caught off guard by India’s export ban. “Our intention is to fulfill export commitments, but we can’t overrule government policy. Therefore, we don’t have any option but to declare force majeure*.”

Buyers expect reliability, and that requires suppliers to have dependable partners. U.S. wheat farmers and their export supply chain partners, with government support, strive to be that dependable partner to world wheat buyers.

By Michael Anderson, USW Market Analyst

*Force Majeure is a provision in a contract that frees both parties from obligation if an extraordinary event directly prevents one or both parties from performing.

Header photo courtesy of Adams Farms LLC in Oklahoma, June 2022


U.S. Wheat Associates (USW) is very pleased that several members of Congress have asked Secretary of Agriculture Tom Vilsack and U.S. Trade Representative Katherine Tai to pursue a World Trade Organization (WTO) case against India’s trade-distorting domestic wheat and rice support.

In separate letters to those officials, members of the U.S. Senate and House of Representatives noted that while India is limited to providing 10% support for crop inputs under its WTO agreement, the government subsidizes half the total cost of wheat and rice production and recently announced a massive new subsidy for fertilizer. The letter also reminds Ambassador Tai and Secretary Vilsack that the United States counter-notified India’s claim that it meets WTO limits on price support. However, India’s government continued raising the guaranteed prices it pays to purchase wheat and rice.

India’s subsidies lead directly to domestic supplies that far exceed India’s acknowledged need for stockkeeping – stocks the government cannot store effectively. As a result, the government unloads stocks into the export market, often at prices below what it paid to purchase the wheat. USDA estimates Indian wheat exports for the marketing year ending June 30, 2022, will be 5 million metric tons (MMT). This leaves almost 28 MMT of wheat stocks remaining.

Chart shows Indian wheat production and exports to illustrate trade distorting wheat and rice subsidies

India’s wheat subsidies encourage over-production, pushing India into the global export market. As a result, stocks exceeding the government’s ability to store wheat periodically distorts trade. Source: USDA Foreign Agricultural Service Production, Supply and Distribution Databases.

The distortion of international wheat and rice trade from these policies is severe, costing U.S. wheat farmers more than $500 million per year in lost income according to a 2020 Texas A&M University study commissioned by USW and USA Rice.

Wrong Subsidies, Wrong Time

Subsidies encouraging over-use of agricultural production inputs are not appropriate when the world is concerned about agriculture’s environmental footprint. We ask the question why is India subsidizing fossil fuel and chemical fertilizer use? Why is India subsidizing over-production that encourages the cultivation of more marginal land?

U.S. wheat and rice farmers rely on open markets and fair trade to sustain their ability to feed the world. USW joins members of Congress and the National Association of Wheat Growers in calling on India to adhere to its international commitments and willingness to work with USDA and the Office of the U.S. Trade Representative to maintain the competitiveness of U.S. wheat in the world.

Graph shows various wheat subsidies reported to WTO.

The U.S. government submits this data to the WTO by the U.S. government as part of a counter-notification. This data shows a wide discrepancy between actual domestic wheat support and the Indian government’s submission.


By Shelbi Knisley, USW Director of Trade Policy

India has invoked the “peace clause” on its domestic agricultural support limits for rice, by notifying the World Trade Organization (WTO) that it has breached its support limits. By claiming its subsidies are part of its public stocks program for food security, invoking the “peace clause” cannot be challenged under the WTO. This is concerning to U.S. producers as many of the same subsidy programs that caused India to exceed its limits on rice are also applied to wheat, which have been shown to distort trade.

The “peace clause” was accepted at the Bali Ministerial in 2013, where WTO members agreed temporarily to not challenge a developing country’s domestic support programs that exceed their agreed-to limits, if the support was in the form of stocks for food security purposes. There are other conditions that must be met, including that the programs must not distort trade.

With all due respect to India’s right to help feed its large impoverished population, it is hard to believe a country that is the largest exporter (making up a quarter of global exports) of rice can claim the “peace clause” for the purpose of food security. India implements minimum support prices (MSP) and input subsidies for many of its crops (including wheat), far exceeding its allowable limits for trade distorting domestic support policies. Policies such as these tend to be some of the most trade distorting programs because they directly encourage additional production. As a result of these hefty subsidy programs, Indian rice and wheat production increases and at times leads to larger stocks and increased exports.

India also has schemes with its wheat subsidies that affect the global wheat market. India is the second largest producer of wheat and, in general, is not considered a large participant in global wheat trade. India has used these market distorting policies to increase wheat production and accumulate stocks overtime.

Based on historical trends, once India’s wheat stocks exceed 20.0 million metric tons (MMT), they become burdensome. Then India struggles with storage capacity and will dump them on the international market at prices assumed to be subsidized by the Government of India (GOI). At such times, India becomes a significant wheat exporter, averaging around 4.0 MMT during the period of exports.

Currently India’s wheat stocks are forecast at a near record 24.0 MMT for 2019/20 (USDA-FAS PS&D), therefore it is expected India will soon need to push those excess wheat supplies onto the market at discounted prices, especially as production is forecast to be the highest on record.

While India should be commended for trying to meet its WTO notification obligations, unfortunately the GOI still uses methodological tricks to disguise its true support levels. With these tricks, India tries to claim a negative support level for wheat production. But as the Office of the U.S. Trade Representative (USTR) demonstrated in a 2018 counter notification, wheat and rice support levels have been out of compliance at levels well beyond what India now admits, leading to over production of these commodities and burdensome stocks.

Those excess stocks have significant implications for U.S. wheat producers. A 2015 study conducted by Iowa State found that India’s wheat subsidies cost U.S. wheat farmers $358 million in lost revenue. As India’s programs continue to grow and distort the global market, USW will continue working to raise awareness of their effects to help ensure fairness in global trade for wheat producers everywhere.


By Dalton Henry, USW Vice President of Policy

Each year, the Office of the U.S. Trade Representative (USTR) compiles and publishes the National Trade Estimates (NTE) report — a comprehensive report detailing barriers that U.S. exporters, including wheat farmers, face in markets around the world.

The first step in compiling the massive report (last year’s came in at 537 pages), is to collect feedback from the export stakeholders. U.S. Wheat Associates (USW) participates in this process each year by consulting with our offices overseas, talking to customers and researching trade barriers. That work culminated last week when USW submitted to USTR its compiled information, covering barriers in a dozen wheat importing countries.

Each year, many of the challenges highlighted in USW’s submission are issues that remain unresolved. This year, however, USW’s reports about on-going concerns with China and India were substantially changed.

The new report on barriers in China reflect the progress made since last year to bring China’s wheat import tariff rate quota (TRQ) and wheat subsidy policies into compliance with the government’s WTO commitments. This year’s report reflects the progress made in those areas as a result of the two WTO cases the United States won last spring, and China’s initial policy proposals to address those WTO rulings.

While the report shows some progress in the China section, it highlights a growing area of concern in India. India runs subsidy programs very similar to China, including minimum purchase prices and input subsidies. USW and USTR have demonstrated previously that India is well outside of its WTO limits in the level of government subsidies. Those subsidies have spurred excess production and subsequent wheat stocks that, once at a critical mass, India must subsidize to dump onto the world market. USDA projects that Indian wheat ending stocks will exceed 20 million metric tons (MMT) for 2019/20 — a level that historical data shows will likely result in India resuming wheat exports in the near future.

USW’s most recent NTE report can be found online here. It provides an overview of the key issues that USW works on every year and supplies USTR with up-to-date information on ongoing problems in wheat trade. In doing so, it fills a vital role in the enforcement of trade rules, something that U.S. farmers and their customers overseas want to see more than ever.


On Feb. 15, 2019, the United States submitted a counter notification, co-sponsored by Canada, in the World Trade Organization (WTO) Committee on Agriculture on India’s market price support for pulse crops – based on publicly available information. With this counter notification, the U.S. government continues to use the rules-based trading system established by the WTO as an appropriate and welcome step toward fairness and transparency for all its member countries.

In May 2018, the U.S. Trade Representative (USTR) formally questioned data India has reported to the WTO about its market price support programs for wheat and rice from marketing years 2010/11 to 2013/14. And in 2016, U.S. Wheat Associates (USW) and the National Association of Wheat Growers (NAWG) welcomed two trade dispute actions by the USTR challenging Chinese government policies that distort the wheat market and harm wheat growers throughout the rest of the world.

Specifically, in September 2016 a U.S. trade enforcement action challenged the level of China’s trade-distorting market price support programs for wheat as well as for corn and rice. In describing its action, the USTR said domestic price support to Chinese farmers “significantly exceeds China’s aggregate measure of support commitments under the WTO Agreement on Agriculture.” In December that year, a U.S. dispute case alleged that China is not fairly administering its annual tariff rate quotas (TRQ) for corn, rice and 9.64 million metric tons of imported wheat. This request stated that China’s TRQ administration unfairly impedes wheat export opportunities.

The WTO is expected to announce the panel decision in the next few weeks on the original U.S. challenge to China’s domestic agricultural subsidies. The TRQ challenge also continues moving through the dispute process at the WTO.

Progress in these dispute cases indicate the WTO dispute mechanisms continue to provide an effective way to challenge unfair practices and policies. But the approach represented by the Trump administration’s use of unilateral tariffs and the threat of escalation to challenge unfair trade practices threatens the stability of the global trading system. That said, instability channeled properly could be beneficial to the trading system and result in greater long-term stability if it results in eliminating trade barriers, rather than creating new ones.

The past two decades have been a lost opportunity for the WTO negotiating function as major countries like China have refused to take on new responsibilities. Perhaps this unfortunate situation will be the wake-up calls countries need to realize that restricting trade and unfairly advantaging domestic industries in global markets winds up hurting everyone.

USW’s stakeholders hope that that the Administration’s alternative policy does result in positive shifts toward a more open trade environment that encourages strong domestic development in all countries. Yet the Administration’s continued use of the WTO dispute settlement and counter notification processes is also a positive sign that trade disciplines, supported by most of the world, will remain an essential part of global trade.