wto and indian agriculture - Presentation Transcript 1.
A moment comes, rarely in history, when we step out from the old to the new, when an age ends, and when the soul of a nation, long suppressed, finds utterance. 2. IMPLICATIONS OF WTO ON INDIAN AGRICULTURE SECTOR. 3. INTRODUCTION. TOPICS TO BE COVERED«. 1. GATT 2. WTO 3. INDIAN AGRICULTURE. 4. WTO AND INDIAN AGRICULTURE. 4. GATT. General Agreement on Tariffs and Trade GATT was formed in 1947 and lasted until 1994 was replaced by the World Trade Organization On 1 January, 1948 the agreement was signed by 23 countries. GATT held a total of 8 rounds. 5. Uruguay Round - 1986-1993 The Uruguay Round began in 1986. It was the most ambitious round to date, hoping to expand the competence of the GATT to important new areas such as services, capital, intellectual property, textiles, and agriculture. 123 countries took part in the round. 6. WTO World Trade Organization The WTO was born out of the General Agreement on Tariffs and Trade (GATT). Headquarters : Geneva, Switzerland Formation : 1 January 1995 Membership : 153 member states Budget : 163 million USD (Approx). 7. It is an international organization designed to supervise and liberalize international trade. The WTO has 153 members, which represents more than 95% of total world trade. WTO cooperate closely with 2 other component IMF and World Bank. 8. Purpose WTO is to ensure that global trade commences smoothly, freely and predictably. Transparency in trade policies. Work as a economic research and analysis centre. 9. Aim To create economic peace and stability in the world through a multilateral system based on consenting member states, that have ratified the rules of the WTO in their individual countries as well. 10. WTO Vs GATT GATT WTO It was ad hoc & provisional. It is permanent. It has legal basis because It had no provision for member nations have verified creating an organization. the WTO agreements. It allowed contradictions in More authority than GATT. local law & GATT agreements. It doesn't allow any contradictions in local law . 11. INDIAN AGRICULTURE. Agriculture in India has a long history dating back to ten thousand years. Today, India ranks second worldwide in farm output. Agriculture accounted for 16.6% of the GDP in 2007, employed 60% of the total workforce and despite a steady decline of its share in the GDP, is still the largest economic
4. OVERVIWE. family disputes. quotas. subject to reduction commitments. 16. price risks and uncertainty. 5. Market access. 19. For domestic support policies. Tariffication means that all non-tariff barriers such as. PROBLEMS. the total support given in 1986-88. EXPORT SUBSIDIES. The Agreement contains provisions regarding members commitment to reduce Export Subsidies. 2. 13. slow progress in implementing land reforms . 3. 17.manned. The WTO Agreement on Agriculture was one of the main agreements which were negotiated during the Uruguay Round. The low productivity in India is a result of the following factors: Overregulation of agriculture has increased costs. and credit markets. resulting in disguised unemployment and low productivity of labour. 3. DOMESTIC SUPPORT. 21. However. was responsible for the research leading to the \"Indian Green Revolution\" of the 1970s. minimum import prices. Government intervenes in labour. 2. 20. 2. INITIATIVES The Indian Agricultural Research Institute (IARI). tariff reduction and access opportunities.. general socio-economic backwardness.12. Special and Differential Treatment 1. After over 7 years of negotiations the Uruguay Round multilateral trade negotiations were concluded on December 1993 and were formally ratified in April 1994 at Marrakesh. 1. established in 1905. Export subsidies. variable levies. The Indian Agricultural Statistics Research Institute develops new techniques for the design of agricultural experiments and specializes in statistical techniques for animal and plant breeding. 18. Domestic support.. For developing countries the percentage cuts are 24%. Illiteracy. 14. Yields per unit area of all crops have grown since 1950 due to application of modern agricultural practices and provision of agricultural credit and subsidies since Green revolution in India. measured by the Total Aggregate Measure of Support (total AMS). WTO AND INDIAN AGRICULTURE Introduction. discretionary licensing. land. Such small holdings are often over. state trading measures. These include purchases for and sales from food security stocks at administered prices provided that the subsidy to producers is included in calculation of AMS. Market access. Developed countries are required to reduce their export subsidy expenditure by 36%. India has inadequate infrastructure and services 15. Developing countries are permitted
. international comparisons reveal that the average yield in India is generally 30% to 50% of the highest average yield in the world. This includes tariffication. Morocco. The WTO Agreement on Agriculture contains provisions in 3 broad areas of agriculture. Inadequate or inefficient finance and marketing services for farm produce. The average size of land holdings is very small due to land ceiling acts and in some cases. 1.
27. rural development and rural employment. 24. Domestic subsidies of rich nation will not effect India.charity for all with firmness in right as god has given us to see the right. reduction in export subsidies. 23. It will be ³just´ to highlight one issue each where the RICH countries and poor countries need to be honest. Many Indian products are cost effective in domestic market. In India. INDIA & AOA Except in rice market . 25. Indirect subsidies available to them are in the form of-: (a) exemption of export profit from income tax under section 80-HHC of the Income Tax (b) subsidies on cost of freight on export shipments of certain products like fruits. So. (b) To create opportunities for expansion of agricultural exports by securing meaningful market access in developed countries. Let us be honest to understand that dominance of politics over economics and fair play will never render justice. 26.
.untargeted subsidised food distribution to meet requirements of the urban and rural poor. 22. exporters of agricultural commodities do not get any direct subsidy. no fear of cheap import flooding Indian market. CONCLUSION. ³With malice toward none . let us strive on to achieve adjust and prosperous nation among all other nation´
Agriculture The WTO agreement on agriculture provides for:
reduction of domestic subsidies. As India was maintaining Quantitative Restrictions due to balance of payments reasons(which is a GATT consistent measure). vegetables and floricultural products. WHAT WE WANT India¶s basic objectives in the ongoing negotiations are: (a) To protect its food and livelihood security concerns and to protect all domestic policy measures taken for poverty alleviation.India is negligible force in global market. India does not provide any product specific support other than market price support. INDIA¶S COMMITMENT. it did not have to undertake any commitments in regard to market access.
But despite the concerns of farmers. a social activist espousing farmers causes in South India. import restrictions and dumping of agri-products in international markets. will die once the import curbs are removed and free flow of food items are allowed into India.000 per capita income annually do not fall under the subsidy reduction requirement.rediff. already reeling under severe drought and fall in cash crop prices. many believe the WTO rules will not adversely affect the Indian agriculture as it is made out.htm
tariff reduction. He says currently there is a massive distortion in the international trade in agriculture. As per the WTO rules. Farmers will be hit hard by the WTO regime.
Activists cry foul that Indian agriculture. coconuts and fruits. rice. rubber. and bindings to provide market access. "There is going to be 'madness' in the agriculture sector. Another advantage for India is that the subsidy reduction requirement under WTO is not applicable to the country. Industrialised countries have been giving huge domestic subsidies to their agricultural sector that there is excessive production.com/money/2001/mar/30wto. So then better overseas markets will be available for Indian agricultural products. What happens to our vegetable oils. Developed nations have committed to the WTO that they would reduce subsidies and tariff. countries having less than $1." asks K Sundaran. That will further improve the country's rural employment and safeguard the food security. if similar items can be imported cheaply from other countries. http://www.
packaging and transport of produce
. oil meal and cake. it is not possible to promote exports without improving produce quality. India too could not gain much from WTO and global liberalization.Post WTO Trade Regime: Lessons for India
Wide-ranging economic reforms introduced in India during 1991 boosted the agricultural trade (exports as well as imports). Import from developing countries domestic production threat like Vietnam. it is evident that: India is facing challenges in traditional export items. However. Post WTO trade scenario for major commodities and implications for future negotiations and strategy Product(s) Trade scene Main factor Future policy and strategy Rice Export adversely Increased competition Improved competitiveness of affected. Argentina particularly soyabean. processed products. erosion of self-reliance. Rising demand for high Seek improved market access. oilseeds.33 billion during 1995-96. etc. fruits and vegetables. the problems of downword trend in exports. high export prospects are seen with high value products. Export prospects are brighter with soybeans. wheat. horticultural products. efficiency and cost reduction. Export of raw products like cotton. but from the developing countries. From the analysis of the trade scene and suggested future strategy by commodities (Table 3). affected Indonesia. despite further liberalization of trade. coffee and tea is likely to become very competitive and India would be required to relook into the benefit of promoting export of these commodities. increase in imports. These trends raise questions about further liberalization of trade in general and specific commodities in particular. Do not spices other developing countries seek too much protection for developing countries Horticultural Exports increased. marine products and
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Table 3. Thailand Wheat Export adversely Low prices and subsidies Seek elimination of export affected. Technologies increased in USA to compete with Bt cotton * Tea.. major import of vegetable oils are from the developing countries (Malaysia and Indonesia).8 billion in 1996-97. The trade got a fillip with WTO agreement during 1995. sharp year to year fluctuations in net trade. Import and support in EU and US subsidies and domestic Threat support in OECD Oilcake Export adversely East Asia crisis and GM Improved varieties of oilseeds affected varieties in USA. though India generally performs better than the other countries when the international price situation is favourable. and the implications of present agreement including ongoing negotiations on AOA in WTO. and India has done well in export of high value products to the developed countries. etc. sugar. thereby resulting in the net trade surplus reaching $ 6. An analysis of the global trends after WTO indicates unprecedented decline in the global prices of agricultural commodities. Export adversely Competition from Vietnam. and fruit preparations. and the net trade surplus in agriculture increased from $ 2 billion during 1992-93 to $ 4. the challenge is not from the developed countries. started soon thereafter. severely hitting earnings from agricultural exports of the countries. Sri Lanka and domestic production. products More scope value and processed food Improve processing. Subsidies in USA reduction in subsidies in USA* Sugar Export adversely Subsidies in EU and USA Seek elimination of export affected subsidies and domestic support in EU and USA* Cotton Export adversely Decline in domestic Seek elimination of domestic affected. Seek and Brazil. Thus. Imports production and subsidies support in USA. Improve competitiveness of coffee. As the exports are becoming increasingly competitive.
marketing and supply. The other lessons include: (i) WTO seeks to remove the barriers of ³our own market´ and ³their own markets´. sugar. They will only agree for marginal reduction. and (v) to comply with quality standards to effectively compete in the global market. meets 40% between different Upgradation of technology domestic demand vegetable oils of oilseeds in the country Wood and Sharp rise in Low duty Raise duty wood products import. Preference for low cost Seek reduction in subsidies meat products More scope and safe products in US and North America* Dairy products Imports possible. Our competitiveness should incorporate this component. etc. otherwise it will become a case of missed opportunity. (iv) import threat can be surmounted by general provision of raising tariff to bound level and of asking for special treatments / packages like S&D treatment. The Agreement on Agriculture created an environment of trade reforms and initiated trade liberalization in agriculture.Meat and Export increased. (ii) India need not be extremely defensive and inward looking. will disappear). (iii) as a net exporting country. cotton.
. the possibility of import threat for our key export products like dairy. Subsidies in EU. USA and Elimination of export Checked through Canada subsidies and domestic tariffs support in EU. wheat. India has to learn lessons from these trends and other experiences. our competition in exportable items has to reckon this reality in addition to the market dynamics across products. the market price fluctuations in primary produce is far higher than in processed products. provided global competitiveness in costs and quality is maintained in domestic production. etc. as our agriculture has demonstrated strength which needs to be appropriately used to compete in the global market. India stands to gain from increase in international prices. sensitive product. Depressed domestic prices
* Developed countries are not going to totally dismantle domestic subsidies of different class in the near future. which is possible only if we relentlessly fight for reduction of domestic subsidies and support and export subsidies in the developed countries (once this is done. we must demand as a first step that all countries should notify their quality requirements clearly on WTO website. Hence. Prohibit blending. 6 Policy Paper 38
rice. USA and Canada* Soyabean oil Serious import Superior technology in Improvement in domestic and other threat other major producing production technologies and vegetable oils countries processing Palm oil Very sharp rise Very cheap price and Consumer awareness about in import which close substitution quality. By and large.