World trade organization, GATT proposal and impact of WTO on Indian agricultural market since its establishment.

2. IMPACT OF W.T.O. ON
INDIAN AGRICULTURAL
MARKET
PRESENTATION BY
Virendra Singh Shekhawat

3. W.T.O.(WORLD TRADE
ORGANIZATION)
GATT :-
 General Agreement on Tariffs and Trade
 GATT was formed in 1947 and lasted until 1994
 On 1 January, 1948 the agreement was signed by 23
countries.
 GATT held a total of 8 rounds.

4.  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. W.T.O.
 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 countries
 Budget : 163 million USD (Approx).
 It is an international organization designed to
supervise and liberalize international trade.
 WTO cooperate closely with 2 other component IMF
and World Bank.

7. OBJECTIVES OF WTO
to implement the new world trade agreement.
promote multilateral trade
improve the level of living and speed up economic
development
promote free trade
enhance competitiveness
increase the level of production and productivity with
employment
expand and utilize world resources
development of poorest nation

8. Scope
 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. FUNCTIONS OF WTO

10. 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
Marrakesh, Morocco.
 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.

11. Market Access
 This includes tariffication, tariff reduction and access
opportunities.
 Tariffication means that all non-tariff barriers such
as...
1. quotas.
2. variable levies.
3. minimum import prices.
4. discretionary licensing.
5. state trading measures.

12. AoA provisions on market access
 Prohibition of quantitative restriction on
import
 Tariff binding and reduction
 Bound versus Applied tariffs
 Tariff Rate Quota
 Special safeguard measures

13. Domestic Support
 WTO uses a traffic light analogy to group program
Green box (non-trade distorting)
Blue box (production limiting)
Amber box (market distorting)
Prohibited(i.e. red box)

14.  Measure be placed in green box
1. It must be publicly funded govt. program and does
not involve transfers from consumers.
2. It must not have the effect of price support to
producer
Or it must comply to these criteria
 A general service e.g. pest and disease control, training,
extension, advisory services, health, safety etc.
 Stockholding of product for food security
 Domestic food aid
 Income insurance or income safety program
 For natural disaster relief etc.

15.  Measure be placed in blue box
 Be based on fixed area and yield
 Be made of 85% or less of the base level of production
 If livestock payments, be made on fixed no of head
 Amber box
 Product specific domestic support
 Non-product specific domestic support

16. Export Subsidies
 The Agreement contains provisions regarding members
commitment to reduce Export Subsidies.
 En export subsidy reduce the price paid by foreign
importer, which mean domestic consumer pay more than
foreign consumer
 Export subsidy in Agricultural Sector
 Direct export subsidies contingent on export performance
 Sale of non-commercial product on less prices than domestic market
 Producer financed subsidy
 Cost reduction measures

17.  Some of agricultural product under 23 product groups,
such as wheat, coarse grain, sugar, beef, cheese and
oilseeds.
 Rates of cut
 Developed countries
 21% by volume
 36% corresponding budgetary outlay
 Over 6 years
 Developing countries
 14% by volume
 24% corresponding budgetary outlay
 Over 10 years

18. 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 poor.

19. Year India's Total Annual Agri- Annual % share of Agri-
Exports (Rs. Growth exports Growth Exports in Total
Crore) Rate (%) (Rs. Crore) Rate (%) Exports
1990-91 32553 17.7 6317 16.5 19.4
1991-92 44041 35.3 7894 24.9 17.9
1992-93 53688 21.9 9082 15.0 16.9
1993-94 69751 29.9 12632 39.1 16.1
1994-95 82674 18.5 13269 5.0 16.0
1995-96 106353 28.6 20344 53.3 19.1
1996-97 118817 11.7 24362 19.8 20.5
1997-98 130100 9.5 24626 1.1 18.9
1998-99 139752 7.4 25387 3.1 18.1
2000-01 203571 27.6 27288 12.3 13.4
2001-02 209018 2.7 28144 3.1 13.4
2002-03 255137 22.1 32473 15.4 12.7
2003-04 293367 15.0 34615 6.6 11.7
2004-05 375340 27.9 38078 10.0 10.1
2005-06 456418 21.6 45220 18.8 0.9
2006-07 571779 25.3 57392 26.9 10.8
2007-08 655864 14.7 76006 32.4 11.5
2008-09 840755 28.2 80648 6.1 9.5
2009-10 845534 0.6 85211 5.6 10.0
2010-11 1142649 35.1 113116 32.7 9.8
TRENDS IN INDIA'S AGRICULTURAL EXPORTS DURING 1990-91 TO 2010-11
Source: 1. Govt. of India, Economic Survey- 2011-12, P. A 80.
2. Govt. of India, Ministry of Agriculture, Agricultural Statistics At a Glance- 2010.

20. ANNUAL COMPOUND GROWTH RATES (ACGR) OF INDIA'S TOTAL
EXPORTS
AND AGRICULTURAL EXPORTS

21. INDIA'S % SHARE IN TOTAL WORLD AGRI- EXPORTS

22. HURDLES IN THE WAY OF AGRICULTURAL
EXPORT

23. India’s commitment
 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.

24.  In India, exporters of agricultural commodities
do not get any direct subsidy.
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, vegetables and
floricultural products.

25. 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, rural development and rural
employment.
 (b) To create opportunities for expansion of
agricultural exports by securing meaningful market
access in developed countries.

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