Download Agriculture in India

Trade Negotiations On Agriculture
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PART I
Agriculture in India
Current Scenario
and
Policy Framework
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Indian Agriculture has made rapid strides since
independence
• From food shortages and import
to self-sufficiency and exports.
• From subsistence farming
to intensive and technology led cultivation.
• Today , India is the front ranking
producer of many crops in the world.
• Ushered in through the
green, white, blue and yellow revolutions
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Indian Agriculture- Some Facts
• Total Geographical Area - 328 million hectares
• Net Area sown - 142 million hectares
• Gross Cropped Area – 190.8 million hectares
• Major Crop Production (1999-2000)
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Rice
89.5 million tonnes
Wheat
75.6 million tonnes
Coarse Cereals
30.5 million tonnes
Pulses
13.4 million tonnes
Oilseeds
20.9 million tonnes
Sugarcane
29.9 million tonnes
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Indian Agriculture- Some Facts
• Contributes to 24% of GDP
• Provides food to 1Billion people
• Sustains 65% of the population : helps alleviate poverty
• Produces 51 major Crops
• Provides Raw Material to Industries
• Contributes to 1/6th of the export earnings
• One of the 12 Bio-diversity centers in the world with over
46,000 species of plants and 86,000 species of animals
recorded
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Major Achievements
India is
• Largest producer in the world of pulses , tea , and milk
• Second Largest producer of fruits, vegetables, wheat , rice,
groundnut and sugarcane.
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IndianAgriculture Scenario
STRENGTHS
WEAKNESS
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Rich Bio-diversity
Arable land
Climate
Strong and well dispersed
research and extension system
OPPORTUNITIES
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Bridgeable yield crops
Exports
Agro-based Industry
Horticulture
Untapped potential in the N.E.
Fragmentation of land
Low Technology Inputs
Unsustainable Water Management
Poor Infrastructure
Low value addition
THREATS
• Unsustainable Resource Use
• Unsustainable Regional
Development
• Imports
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Current Concerns
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Pressure of the Population on Land
Skewed distribution of operational holdings
Land Degradation
Water Balance
Low level of mechanization
Low Fertilizer Consumption
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The First Ever National Agriculture Policy was
announced in July 2000. The Policy seeks to
overcome these constraints and achieve
• A Growth rate in excess of 4 percent per annum in the
agriculture sector.
• Growth that is based on efficient use of resources, and
conserves our soil, water , and bio diversity.
• Growth with equity, i.e. growth which is widespread across
regions, and different classes of farmers.
• Growth that is demand driven and stabilizes domestic
markets and maximizes benefits from exports in the face of
Global Challenges.
• Growth that is sustainable ,technologically , environmentally,
and economically.
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The Policy has indicated a nine-fold package of
policy initiatives to achieve the objectives
• Development of Sustainable agriculture
• Food and Nutritional security
• Generation and Transfer of Technology
• Improvement of input efficiency
• Provision of incentives for agriculture
• Promotion of Investments in agriculture
• Strengthening of institutional infrastructure
• Better risk management
• Introduction of Management Reforms
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TARGETS
• Food Grain Production will be doubled in ten years, so as to
make India hunger free .
• Special emphasis will be on horticulture production in order
to achieve a quantum increase.
• Allied sectors like live stock, dairy poultry, fisheries, will be
promoted
• Production of oilseeds and pulses will be raised substantially.
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Strategies & Initiatives : Enhancing Value Addition
- 98% of fruits and vegetables are sold as fresh products.
- processing accounts for only 7% of agricultural value.
- wastage levels are extremely high.
• Improved post harvest interventions: price support
mechanism, grading, handling, storage, packaging,
marketing, processing.
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Strategies & Initiatives : Enhancing Value Addition
• Draft National Policy on Food Processing prepared.
• Draft Processed Food Development Act formulated.
• Package of promotional schemes available for
infrastructure development and quality improvement.
• To raise the processing level by 10% , an investment of
approximately Rs 1400 billion required.
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India’s International Trade - 2001-02
Agriculture
Non-Agriculture
2500
2000
120
289
1500
1000
2148
1736
500
0
Exports
Imports
Rs Billions
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Strategies & Initiatives : Promotion of Exports
• India’s competitive advantage
- Diverse agro climatic conditions.
- Sufficiency of Inputs.
- Reasonable labour costs.
• Agriculture exports from India account for less than 1% world trade in
Agriculture commodities.
- Target is to raise India’s share to 2% .
• Thrust Areas
Improvement and maintenance of quality.
Consonance with International Standards.
Strengthening of Infrastructure.
Identification of niche products and markets.
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India’s Agricultural Export Potentials
 Marine Products
 Rice
 Wheat
 Condiments and Spuces
 Cashew
 Tea
 Coffee
 Castor
 Jute
 Fruits and Vegetables- Onions, Mango, Grapes, Banana,
Tomato , Potato , Lichchi ,etc.
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PART II
Negotiations on WTO
Agreement
On
Agriculture
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Uruguay Round Agricultural Negotiations
• Prompted by surpluses in post-war period and
consequent disarray in world agriculture.
• Disciplines with regard to all measures affecting
trade in Agriculture envisaged.
• Including not only import access but also domestic
policies, export subsidies , sanitary and
phytosanitary measures.
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Agreement on Agriculture (AOA)
• AOA and Agreement of Application on Sanitary
and Phytosanitary Measures were negotiated in
parallel
• Decision on measures concerning the possible
negative effects of the reform programme o least
developed and net food importing developing
countries also a part of the package
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Mandated Negotiations under Article 20 of
AOA for continuation of the reform process
• Negotiations to commence one year before the end
of the implementation period i.e. in January 2000,
taking into account:
- Experience in implementing reduction
commitments
-Effect on world trade in Agriculture
-Non Trade concerns, S&D treatment
-Further Liberalization
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Two Fold Approach
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Experience in the implementation of the
Agreement leads us to conclude that basically the
problems can be tackled on two planes, namely;
a) Through positive efforts and binding commitments by
Developed Countries in Undertaking substantive
reductions in tariff levels, tariff escalation, trade
distortive domestic support and elimination of export
subsidies and tariff peaks,etc
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Two Fold Approach
b. Through specific and targeted S&D provisions within
the existing framework of AOA , which would go
beyond longer transition periods and reduced rates of
reduction, keeping in view the developmental
objectives in developing countries
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India’s Priorities / Recommendations in
Negotiations
Domestic Support
• Remove ambiguities in the calculation of AMS
• Empty Blue Box and put a ceiling on all forms of direct
payments and include these in AMS
• Negative product specific support figures should be allowed
to be adjusted against the positive non-product-specific AMS
support figures
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India’s Priorities / Recommendations in
Negotiations
Domestic Support
• Product specific support provided to low-income resource-
poor farmers should be excluded from AMS calculations
• Total domestic support should be brought down below the de
minimis level within a maximum period of three years by
developed countries and five years by developing country
members
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India’s Priorities / Recommendations in
Negotiations
Food Security & Development Concerns
• Strengthen mechanisms to deal with genuine food security
concerns of developing countries through a “food security
box”
• Developed country members should not be allowed to use
SPS measures for protectionist purposes by prescribing
overly stringent trade restrictive SPS measure for denying
market access to developing countries
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India’s Priorities / Recommendations in
Negotiations
• All measures taken by developing countries for poverty
alleviation from rural development, rural employment and
diversification of agriculture should be exempted from any
reduction commitments
Market Access
• Appropriate level of tariff bindings to be allowed to be
maintained by developing countries as a Special &
Differential Measure , keeping in mind their developmental
needs and high distortions prevalent in international markets
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India’s Priorities / Recommendations in
Negotiations
• Developing country members should be exempt from any
obligation to provide any minimum market access.
• A special safeguard mechanism including a provision for
imposition of quantitative restrictions under specified
circumstances to be made available to all developing
countries in case of search in imports or decline in prices etc.
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India’s Priorities / Recommendations in
Negotiations
• Low tariff bindings in developing countries as could not be
rationalized in earlier negotiations should be allowed to be
raised to the ceiling bindings for similar category of products,
committed during the Uruguay Round
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India’s Priorities / Recommendations in
Negotiations
Export Competition
• Bring down excessively high tariffs to moderate levels in
developed countries through an appropriate formula
• Tariff reductions for developing countries should commensurate
with their developmental needs
• Abolish TRQ’s. Restrictions on trade only in the form of tariffs
and tariffs only
• If not possible ,then make their administration transparent , fair
and equitable
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Status of Negotiations
• Negotiations in agriculture commenced with the first special
session of the Committee on Agriculture held in March 2000
• The first phase of the negotiations ended in March 2001
• India also filed its proposals in the areas of market access,
food security, domestic support and export subsides & cosponsored proposals on market access and export subsidies
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Status of Negotiations
• The second phase began in May 2001 and has concluded
with the Special Session meeting of February 2002
• Country positions fairly well defined during this phase of
negotiations
• A non paper on S&D presented by India in the Special
Session held in February 2002
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Developed Country Positions
• EU against fast track approach to liberalization
• Nordic Countries and Japan for continuation of
subsidy regimes in agriculture
• Australia , New Zealand and Canada (of Cairns
Group) favor a totally market oriented approach and
oppose trade distorting subsidies and protectionist
regimes of EU and Japan
• US , opposing EU, but not completely with Cairns
Group either, aggressively seeks market access in
other WTO member countries
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Cairns Group Position
• Demands elimination of export subsidies and
domestic subsidies as goals of on going agricultural
negotiations
• Calls for better information and analysis of tariff
rates tariff quota administration
• Supports transparent and targeted S&D for
developing countries
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Developing Country Positions
• India, Pakistan, Sri Lanka, ASEAN etc highlight
significance of role of agriculture in their economies
and seek to preserve domestic policy flexibility to
guard food security concerns
• Developing Cairns Group Countries (Argentina,
Brazil ,South Africa) favour a market oriented &
non trade distortive approach
• Net Food Importing Countries (Single Crop
economies) like Egypt, Mauritius, etc favour gradual
and phased reduction in export subsidies
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India’s Objectives / Strategy in the
Negotiations
• Extend the use of SSGs to all countries and make their use
more transparent
• Get rid of special clauses and bilateral commodity specific
arrangements
• Eliminate discretion in application of SPS standards
• Abolish export subsidies completely within a time frame of 3
to 5 years. Include all forms of export subsidies in the
calculation of total subsidies
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India’s Objectives / Strategy in the
Negotiations
• Flexibility to pursue our domestic support policies
for agriculture to protect our food security and
livelihood concerns
• Retaining appropriate level of bound tariffs for
protecting our farmers
• Seek additional opportunities for increasing our
exports
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Doha Ministerial Declaration
• The long term objective of establishing a fair and
market oriented trading system reaffirmed
• Need for fundamental reform through strengthened
rules and specific commitments on support and
protection reiterated
• Comprehensive negotiations sought for affecting:
 substantial improvements in market access
 Reductions leading to eventual phasing out of all forms of export subsidies
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Doha Ministerial Declaration
• Substantial reduction in trade distorting domestic
support
• Special & Differential treatment to be an integral
part of the negotiations
• Modalities for further commitments to be finalised
by 31March 2003
• Comprehensive draft schedules to be submitted by
the 5th Session of the Ministerial Conference
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Some Elements of Indian Work Programme
• Market Access
• Tariff line wise analysis required to be undertaken to
formalize our position with regard to tariff reductions
• In depth study with regard to the utility and application of
the special safegaurd mechanism for developing countries
like India
• Formulate our position on Tariff Rate Quotas (TRQs)with
a view to increasing our market access through the same
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Some Elements of Indian Work Programme
• Domestic Support and Export Subsidies
• Review of the Green Box measures to make them more
development oriented
• An analysis of the current level of trade distorting support
and subsidies which are required to be disciplined in view
of the prevalent distortions in the international market
• Developing disciplines on export credits ,export
guarantees, insurance , etc
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Some Elements of Indian Work Programme
• Special and Differential provisions
• Specific modalities under the 3 areas of market access ,
domestic support and export subsidies would need to be
developed
• This would involve development of sound economic
justification for seeking either differential rate of reduction
or specific measures so as to safegaurd food and
livelihood security objectives in developing countries’
agricultural sector
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THANK YOU
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