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.
IMPLICATIONS OF WTO ON
INDIAN AGRICULTURE SECTOR.
• TOPICS TO BE COVERED….
3. INDIAN AGRICULTURE.
4. WTO AND INDIAN AGRICULTURE.
• General Agreement on Tariffs and Trade
• GATT was formed in 1947 and lasted until
• was replaced by the World Trade
• On 1 January, 1948 the agreement was signed
by 23 countries.
• GATT held a total of 8 rounds.
• 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.
• 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).
• 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.
• WTO is to ensure that global trade
commences smoothly, freely and predictably.
• Transparency in trade policies.
• Work as a economic research and analysis
• 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.
WTO Vs GATT
• 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
• It doesn't allow any
contradictions in local law .
• Agriculture in India has a long history dating
back to ten thousand years.
• Today, India ranks second worldwide in farm
• 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
• 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.
• However, international comparisons reveal that
the average yield in India is generally 30% to 50%
of the highest average yield in the world.
• The Indian Agricultural Research Institute
(IARI), established in 1905, was responsible for
the research leading to the quot;Indian Green
Revolutionquot; of the 1970s.
• The Indian Agricultural Statistics Research
Institute develops new techniques for the design
of agricultural experiments and specializes in
statistical techniques for animal and plant
The low productivity in India is a result of the
• Overregulation of agriculture has increased
costs, price risks and uncertainty.
• Government intervenes in labour, land, and
credit markets. India has inadequate
infrastructure and services
• Illiteracy, general socio-economic
backwardness, slow progress in implementing
land reforms .
• 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, family
• Such small holdings are often over-
manned, resulting in disguised unemployment
and low productivity of labour.
WTO AND INDIAN AGRICULTURE
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
• The WTO Agreement on Agriculture was one
of the main agreements which were
negotiated during the Uruguay Round.
• The WTO Agreement on Agriculture contains
provisions in 3 broad areas of agriculture.
1. Market access.
2. Domestic support.
3. Export subsidies.
• This includes tariffication, tariff reduction and
• Tariffication means that all non-tariff barriers
2. variable levies.
3. minimum import prices.
4. discretionary licensing.
5. state trading measures.
• For domestic support policies, subject to
reduction commitments, the total support
given in 1986-88, measured by the Total
Aggregate Measure of Support (total AMS).
• The Agreement contains provisions regarding
members commitment to reduce Export
• Developed countries are required to reduce
their export subsidy expenditure by 36%.
• For developing countries the percentage cuts
Special and Differential Treatment
1. 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.
2. Developing countries are permitted
untargeted subsidised food distribution to
meet requirements of the urban and rural
• As India was maintaining Quantitative
Restrictions due to balance of payments
reasons(which is a GATT consistent
measure), it did not have to undertake any
commitments in regard to market access.
• India does not provide any product specific
support other than market price support.
• In India, exporters of agricultural commodities
do not get any direct subsidy.
Indirect subsidies available to them are in the
• (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, vegetables and floricultural products.
WHAT WE WANT
• India’s basic objectives in the ongoing
• (a) To protect its food and livelihood security
concerns and to protect all domestic policy
measures taken for poverty alleviation, rural
development and rural employment.
• (b) To create opportunities for expansion of
agricultural exports by securing meaningful
market access in developed countries.
INDIA & AOA
• Except in rice market ,India is negligible force
in global market.
• Domestic subsidies of rich nation will not
• Many Indian products are cost effective in
• So, no fear of cheap import flooding Indian
It will be “just” to highlight one issue each
where the RICH countries and poor countries
need to be honest.
Let us be honest to understand that
dominance of politics over economics and fair
play will never render justice.
• “With malice toward none ,charity for all with
firmness in right as god has given us to see the
right, let us strive on to achieve adjust and
prosperous nation among all other nation”