“Agriculture, Trade and Food Security: India”

Citation: Panda, M. and A. Ganesh-Kumar. 2000. “India”. Chapter 6 in Agriculture, Trade and Food Security: Issues and Options in the WTO Negotiations from the Perspective of Developing Countries, Volume 2 – Country Case Studies, Food and Agricultural Organization of the United Nations, Rome.

Abstract: This paper is one of the background studies initiated by the FAO to review the experience of developing countries with the Uruguay Round Agreement on Agriculture (AoA). What has been India’s experience with the AoA? What do the different aspects of the AoA mean for India and what are the likely impacts / issues involved in meeting these WTO obligations? Are there some issues of special concern to India which it should pursue in the forthcoming review meetings? This study addresses these questions. Its main findings are:

The AoA involves only a very modest degree of trade liberalization. It leaves plenty of room for disputes, partly arising from vagueness in the rules formed. The main achievement of the Uruguay Round has been to put agriculture in the GATT/WTO discipline. Several areas could be taken up during the review at the end of 1999 to take the reform process forward. Right now, several critical areas in the AoA seem to be too general. For example, WTO should move quickly towards permissible domestic support limits at the product level rather than in aggregate terms so that countries could use their comparative advantage effectively. Similarly, several rules governing SDT and sanitary and phytosanitary provisions need to be made transparent. India and other developing countries could then participate more effectively in the world market.

In terms of implementation, India needs to do very little to meet its WTO obligations, except remove the QRs it still has in place, and instead go in for tarrification. It is acknowledged by most including the WTO that India made significant progress on the latter while still has a lot to do on the former. India should aggressively push for the removal of all NTBs in agriculture except for countries facing serious BOP problems; push for an uniform maximum tariff bound of 40-50% at the commodity level for all agricultural products and renegotiate for the application of such bounds on all commodities on which it had agreed to a zero or lower tariff bound in earlier trade negotiations; argue for the abolition of tariff quotas; advocate bounds on AMS at the commodity level rather than for agriculture as a whole; negotiate to retain the right to levy an export tax on commodities in which the country has market power in order to finance consumption subsidies that are essential to ensure food security for the poor; work towards ensuring that adequate dispute settlement mechanisms are put in place to handle situations where legitimate operation of buffer stock for food security purposes is perceived by other trading partners to be a violation of WTO rules.

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