(1) INTRODUCTION

The World Trade Organization (WTO) is an international

organization designed by its founders to supervise
and liberalize international trade. The organization officially commenced on
January 1, 1995 under the Marrakech Agreement, replacing the General
Agreement on Tariffs and Trade (GATT), which commenced in 1947.
The World Trade Organization deals with regulation of trade between
participating countries; it provides a framework for negotiating and
formalizing trade agreements, and a dispute resolution process aimed at
enforcing participants' adherence to WTO agreements which are signed by
representatives of member governments and ratified by
their parliaments. Most of the issues that the WTO focuses on derive from
previous trade negotiations, especially from the Uruguay Round (1986-
1994).
The organization is currently endeavoring to persist with a trade negotiation
called the Doha Development Agenda (or Doha Round), which was
launched in 2001 to enhance equitable participation of poorer countries
which represent a majority of the world's population. However, the
negotiation has been dogged by "disagreement between exporters of
agricultural bulk commodities and countries with large numbers of
subsistence farmers on the precise terms of a 'special safeguard measure' to
protect farmers from surges in imports. At this time, the future of the Doha
Round is uncertain."
The WTO has 153 members, representing more than 95% of total world
trade and 30 observers, most seeking membership. The WTO is governed by
a ministerial conference, meeting every two years; a general council, which
implements the conference's policy decisions and is responsible for day-to-
day administration; and a director-general, who is appointed by the
ministerial conference. The WTO's headquarters is at the Centre William
Rappard, Geneva, Switzerland.
(2) WTO, FARM EXPORTS AND GROWTH

IN 1995, when the various agreements were signed under the WTO, there
were great expectations. That in a liberalised trading environment for
agriculture, tariff and non-tariff barriers would come down and fair trading
opportunities would open up for all countries, including India.

Based on these assumptions of substantial reductions in tariff and non-tariff

barriers, some studies predicted enormous gains to developing countries.
These macro models assumed perfectly competitive markets for agricultural
commodities. Unfortunately, even after seven years of signing the WTO
agreement, an imperfectly competitive export market persists.

The developed, Western, countries have found several escape routes to

circumvent the spirit of the WTO agreement and failed to bring about
substantial reduction in domestic and export subsidies in their own
countries. Thus, an imperfectly competitive export market structure for
agricultural commodities persists.The emergent scene is humbling for the
market evangelists who had predicted buoyancy in agricultural exports for
developing countries, post-WTO, and had entertained fantasies about
agricultural exports acting as an engine of growth for the economy as a
whole. Of course, India should exploit such opportunities of export but this
would imply development of small segments of the agricultural sector.

India has to focus on non-trade and non-price factors to accelerate

agricultural growth, bring about rural development and welfare. Over the
years, though the share of agriculture in total GDP has declined
substantially, dependence on agriculture has hardly declined. Agriculture
will continue to remain the main livelihood for the bulk of the population.
Hence' broad-based agricultural, and not enclave growth, should be at the
centre of rural development and welfare. Use of the alarmingly large
foodgrain stocks that add up to more than 60 million tonnes is another
strategy. Of course, focussing on these areas would also strengthen India's
agricultural export capabilities.
There is a broad consensus that at present, globalisation is highly inequitable
and biased against developing countries. For instance, global agricultural
subsidies are estimated to add up to some $360 billion annually, or nearly a
billion dollars a day. Of this total, 80 per cent is accounted for by OECD
countries. Unless domestic and export subsidies are reduced in the
developed countries, a fair and just international trade regime in agricultural
commodities remains a text-book concept.

As the Director-General of the World Food Policy Research Institute and the
2001 World Food Prize laureate, Dr Per Pinstrup-Andersen puts it, "Unless
developed countries are willing to open their markets to temperate-zone
agricultural exports from developing countries and end tariff escalation
against processed and higher value products, the benefits that developing
countries and the poor people who live in them will derive from
globalisation will be limited".

The mention of the emphasis on "non-price factors" is deliberate. In Indian

agriculture, supply response to prices is rather poor. Assuming that there is a
rise in the export prices of a commodity it does not automatically ensure
larger production of that commodity. Along with price rise, farm technology,
extension, credit, and marketing — all these have to lend support to
production efforts.

The success of the approach lies in linking utilisation of foodgrains to

productive activities. The micro watershed development programme can be
undertaken on a massive scale throughout the country. The bulk of the costs
of such programmes would be accounted for by wages which can be paid in
kind — foodgrains. The technology involved is simple and village
panchayats can implement these schemes.

By using surplus foodgrains, it will be possible to create additional

employment and incomes to the rural poor. The insurance against drought is
another gain to the economy. Providing food security involves a two-fold
objective — enlarging availability of foodgrains and providing access to
food. Programmes, such as the micro watershed development, provide
the modus operandi to achieve the twin objectives.
One is not expressing `export pessimism' in the neo-classical sense. Given
the unwillingness, and not the inability, of developed countries to dismantle
their massive domestic support and export subsidies to agriculture in their
countries, it would be unrealistic to expect a major breakthrough in India's
agricultural exports.

The thrust of the export effort would have to be highly selective. For
instance, India has become a major rice exporter. Indian rice is likely to
remain competitive, especially in Asian markets, given the lower freight
costs, compared to the US.

In the 1990s, India increased its exports of both fresh and processed fruits
and vegetables, but further expansion in this area would require
improvement in infrastructure, storage, transport, processing, and the ability
to meet sanitary and technical requirements in developed country markets.
Fish exports, where there is also a potential competitive advantage, are also
conditioned by similar limitations.

It is clear that the key to accelerating agricultural growth and promoting

rural welfare lies in more public investment in rural infrastructure, irrigation,
road, farm technology, extension, and so on. The thrust on agricultural
exports would have to be highly selective and the impact of agricultural
export growth on overall growth in GDP and rural welfare could at best, be
marginal.
(3) WORLD EXPORTS TOTALED $15.78
TRILLION IN 2008

The WTO report noted that trade rose 2% in real or volume terms in 2008
after rising 6% in 2007 of which the share of developing country was 38%

Geneva: World exports of merchandise goods grew 15% in nominal terms in

2008 to $15.78 trillion, while exports of services rose 11% to $3.73 trillion,
the World Trade Organisation (WTO) said on Wednesday.

In its latest ade Report, the WTO gave no forecast for trade this year, but in
June, WTO Director-General Pascal Lamy Pascal Lamy said the WTO had
revised its forecast for the contraction in world trade volume this year from
9% to 10%.

That figure was confirmed in a press release issued on Wednesday, which

said however the contraction appeared to be slowing.

“The response of governments around the world will play a big part in
determining the magnitude of this decline and its duration,” the WTO said in
the release.

Lamy and WTO chief economist Patrick Low are due to comment on the
report at a news conference in Singapore on Wednesday.

The WTO report noted that trade rose 2% in real or volume terms in 2008
after rising 6% in 2007.

“However, trade still managed to grow more than global output, as is usually
the case when production growth is positive,” it said. “Conversely, when
output growth is declining, trade growth tends to fall even more, as is
evident in 2009”.

The share of developing country exports in world trade rose to a record 38%
in 2008, the WTO said.

Germany retained its position as the world’s leading merchandise exporter

last year, with exports of $1.47 trillion, slightly larger than China’s $1.43
trillion.
China’s export performance faltered at the end of 2008. Its exports to the
United States rose only one percent over the whole year after growth of 14%
in the third quarter.

The United States was the biggest importer, bringing in $2.17 trillion of
merchandise goods, 13.2% of the total, followed by Germany with a 7.3%
share of $1.21 trillion.

Total world imports rose 15% to $16.12 trillion, giving a $345 billion
discrepancy with exports, due to different ways of measuring imports and
exports, the WTO data show.

The severity of the slowdown was reflected in a fall of 23% in air cargo
traffic in December compared with a year earlier, according to International
Air Transport Association (IATA) figures, the WTO said.

The decline recorded in September 2001, when most of the world’s aircraft
were temporarily grounded following the attacks on the United States, was
only 14%.
(4) INDIA’S EXPORTS DOUBLED IN LESS
THAN A DECADE

India’s exports have almost doubled in less than a decade, since 1995, when
India became a member of the WTO. India’s exports have gone up from US
$ 26330.60 million ($ 26.3 billion) in 1994-95 to US $ 51702.22 million ($
51.7 billion) in 2002-03. India’s share in total world exports of goods and
commercial services has increased from 0.61% in 1995 to 0.86% in 2001,
while that in respect of total world imports of goods and commercial
services for the same period increased from 0.78% to 0.99%.

Since the entry into force of the General Agreement on Tariffs and Trade
(GATT) with effect from 1st January, 1948 and until the establishment of the
World Trade Organisation (WTO) on 1st January 1995, eight Rounds of
Multilateral Trade Negotiations (MTN) were held. After the coming into
being of WTO, Five Ministerial Conferences have been held. Doha Work
Programme was launched in the Fourth Ministerial Conference at Doha.

Regarding textiles, in accordance with the WTO’s Agreement on Textiles &

Clothing (ATC), all WTO Member countries were required to integrate
specific volumes of their textiles and clothing trade into the WTO
framework. In addition, the size of quotas was expanded annually by the
restraining countries that maintained the quota. These measures have led to
increase in market access, to a certain extent, although most of these quotas
would be removed only at the last stage of integration under the ATC on 31
December 2004. With effect from 1.1.2005, the entire textiles and clothing
trade would get integrated into the multilateral framework of the WTO, with
the completion of the phase-out of the regime of textile quotas.

By being a WTO member, India also avails of the Most Favoured Nation
(MFN) Treatment and National Treatment for its exports to other WTO
members.

Meanwhile, the Department of Commerce in collaboration with the United

Nations Conference on Trade & Development (UNCTAD) and the UK
Department for International Development (DFID) in January 2003
launched a project, entitled "Strategies and Preparedness for Trade and
Globalisation in India". The aim of the projects is two-fold, viz., to assist in
understanding the development dimension of key trade issues, particularly as
they related to the current WTO agenda; and to strengthen the country’s
human and institutional capacity for analysis of globalisation-related issues
and facilitate a policy environment that will support and sustain a more
equitable process of globalisation.

The World Investment Report (WIR) of UNCTAD is an exercise for

assessing the interaction between national and international FDI policies and
the implications thereof on development. WIR 2003 has advocated a
development-oriented FDI policy for developing countries in the context of
International Investment Agreements (IIAs). In so far as FDI flows into
India is concerned, the WIR has shown that the inflows have registered an
increase over the last three years. The FDI inflows into India during the last
three years as reported by WIR 2003 are : 2000 -- US $ 2.32 billion; 2001 --
US $ 3.40 billion; and 2002 – US $ 3.44 billion. The FDI policy of the
government is liberal and transparent with a great degree of automaticity
built-in. The policy is reviewed on an ongoing basis with a view to
introducing further liberalisation and also carry out policy corrections
required, if any.
(5) WTO- AGREEMENT ON AGRICULTURE
(AoA) NEGOTIATIONS

STATE OF PLAY

WTO GENESIS

• The General Agreement on Trade and Tariff (GATT) came into

existence in 1947

• It sought substantial reduction in tariff and other barriers to trade and

to eliminate discriminatory treatment in international commerce.

• India signatory to GATT 1947 along with twenty two other countries

• Eight rounds of negotiations had taken place during five decades of its
existence

• WTO Came into existence on 1-1-1995 with the conclusion of

Uruguay Round Multilateral Trade Negotiations at Marrakesh on 15th
April 1994, to :

• Transparent, free and rule-based trading system

• Provide common institutional framework for conduct of trade

relations among members

• Facilitate the implementation, administration and operation of

Multilateral Trade Agreements

• Rules and Procedures Governing Dispute Settlement

• Trade Policy Review Mechanism

• Concern for LDCs and NFIDCs

 • Concern on Non-trade issues such as Food Security,
environment, health, etc.

BASIC PRINCIPLES

1. NON-DISCRIMINATION
 MFN (exceptions RTAs, SPS)
 National Treatment (exceptions Government Procurement,
GATS)

2. MARKET ACCESS
 Reduction and binding of tariffs
 General elimination of quantitative restrictions on imports and
exports
(exceptions Article XX, XXI of GATT

WTO AoA

WTO- AoA Aims at

• Fair and market oriented trading system

• Commitments on support and protection
• Operationally effective GATT Rules & Disciplines
• Equitable Trade Reform process
• Greater opportunities and Terms of Access to developing
countries
• Concern for LDCs and NFIDCs
• Concern on Non-trade issues such as Food Security,
environment, health, etc.
Reduction Commitments in WTO-AoA

NEGOTIATED REDUCTION Implementation Period

Developed Developing
Countries Countries
(1995-2000) (1995-2004)
% %
Market Access
Average tariff cuts for all-36 -24
ag.products -15 -10
Minimum tariff cuts per product

Domestic Support -20 -13

Total cuts in aggregate
measurement of
support -36 -24
-21 -14
Export Subsidies
Value cut
Volume Cut

Domestic Support

• Green Box - Research, Extension, PDS, Decoupled

Payments etc;

• Blue Box - Production Limiting Subsidies ;

• Amber Box - AMS-subject to reduction commitments

viz
- Product specific (MSP)
- Non product specific (input subsidies-fert. Power,
irrigation) ;
REVIEW OF AoA

THE STATE OF PLAY

THE MANDATE OF ARTICLE 20

ARTICLE 20 OF THE AoA MANDATES FRESH NEGOTIATIONS :
-STARTED IN 2000, TAKING INTO ACCOUNT
A) THE EXPERIENCE OF IMPLEMENTATION TO DATE
B) THE EFFECTS ON WORLD TRADE IN AGRICULTURE
C) NON TRADE CONCERNS
D) WHAT FUTURE COMMITMENTS ARE NECESSARY TO
ACHIEVE THE LONG TERM OBJECTIVES

Phase I: March 2000 to March 2001

a) the experience of implementation to date

b) the effects on world trade in agriculture
c) non trade concerns
d) what future commitments are necessary to achieve the long term
objectives

Around 45 Negotiation proposals submitted by 126 Members in Phase-I to

cover:
Market Access
Domestic Support
Export Subsidies
Non Trade Concerns
Phase II: March 2001 to February 2002

Modalities and timeframe for of the negotiating process decided in the

March 2001 Special Session.
·
Six Special Sessions of Committee on Agriculture held during 2001-02
and discussed various negotiating proposals.

Phase III: March 2002 to March 2003

Commenced from March 2002

During 2002-03 , the meetings of Committee on Agriculture to discuss the
issues on export competition, market access and domestic support.

India’s Approach to the Negotiations

1. Comprehensive negotiating proposal submitted to WTO on 15.1.2001

covering Food Security, Market Access, Domestic Support, and
Export Competition

1. Non paper on Special and Differential Treatment to Developing

Countries
India Seeks

• Protecting our food and livelihood security by having sufficient

flexibility for domestic policy measures.

• Protecting domestic producers from the surge in imports or significant

decline in import prices.

• Substantial reduction in export subsidies and domestic support to

agriculture in the developed countries for greater market access to
products of developing countries.

• Finally, a more equitable & fair trading framework for

agricultural commodities

Market Access

The negotiations on market access should include the following issues:

Comprehensive binding of tariffs

Reduction of peak tariffs and removal of tariff escalations

Reduction in the number of tariff rate quotas (TRQs) in a progressive

manner

Volume of imports allowed under quotas to be substantially expanded till

TRQs are eventually eliminated

Transparent administration of TRQs

Domestic support

The negotiations on domestic support should include the following

elements:

Substantial reductions in all forms of domestic support should be

undertaken by the developed countries.

Subsidies excluded from the discipline introduced by the AoA, i.e. those
appearing in the “Blue Box” and the “Green Box”, need to be re-assessed,
particularly from the point of view of their influence on production.

The Peace Clause “Article 13 (a) and 13 (b)” shall not be extended
beyond implementation period.

Export Subsidies

The negotiations on export subsidies should include the following issues:

Countries using export subsides should phase out this form of farm
support within two years of implementation of the revised disciplines to be
followed by countries in the agricultural sector.

Export subsidies discipline should include all forms of spending that

enhances the capacities of exporters to increase trade, e.g. export credit,
guarantees and insurance programmes.

The Peace Clause “Article 13 (c)” shall not be extended beyond

implementation period.
Non-Trade Concerns

The issue of non-trade concerns should be articulated as under:

Non-trade concerns should be adequately reflected in the decisions,

particularly those related to market access and domestic support.

The AoA needs to provide an enabling environment for the countries to

address the concerns relating to food security and livelihoods.

The relevant decisions of the World Food Summit on food security and
livelihoods need to be integral part of the negotiations.

S&D in Doha Ministerial Declaration

“We agree that special and differential treatment for developing countries
shall be an integral part of all elements of the negotiations and shall be
embodied in the Schedules of concessions and commitments and as
appropriate in the rules and disciplines to be negotiated, so as to be
operationally effective and to enable developing countries to effectively take
account of their development needs, including food security and rural
development”

S&D to Developing Countries

• Increase the levels of MFN tariffs on sensitive products

• Special Safeguards (SSGs)
• •No requirement to provide minimum access
requirementsAdministration of tariff rate quotas for improved market
access
• Right to use export subsidies
• Exemption for resource poor farmers in Product Specific Support
Issues of Regional Importance

• 1. Crops that are significant from the point of view of sustaining

livelihoods and regional development

• 2. Crops in which the individual states can be considered to be

efficient producers considering the global trends

• 3. Crops in which the states have been accumulated surpluses

• 4. Crops that face the threat from cheap imports

• 5. Crops that have been facing fluctuating prices, resulting in

uncertainties for the farmers

Ex p o r t o f im p o r ta n t a g r ic u ltu r a l p r o d u c ts

5 0 0 0 .0 0
4 5 0 0 .0 0
e x p o r ts
4 0 0 0 .0 0
Ric e
3 5 0 0 .0 0
Rs. in crores

3 0 0 0 .0 0 e x p o r ts
2 5 0 0 .0 0 s p ic e s
2 0 0 0 .0 0
1 5 0 0 .0 0 e x p o r ts
1 0 0 0 .0 0 Te a
5 0 0 .0 0 e x p o r ts
0 .0 0 Co f f e e
1 9 9 0 -1 9 9 1 -1 9 9 2 -1 9 9 3 -1 9 9 4 -1 9 9 5 -1 9 9 6 -1 9 9 7 -1 9 9 8 -1 9 9 9 -2 0 0 0 -
91 92 93 94 95 96 97 98 99 2000 01
 Export vs import of agricultural products

35000.00
Rs. in crores 30000.00
Total
25000.00
Agricultural
20000.00 exports
15000.00

10000.00 Total
5000.00 Agricultural
Imports
0.00
1990- 1991- 1992- 1993- 1994- 1995- 1996- 1997- 1998- 1999- 2000-
91 92 93 94 95 96 97 98 99 2000 01

Export vs import of total products

250000.00
Rs . in c r o r e s

200000.00 Total
National
150000.00
exports

100000.00
Total
50000.00
National
Im ports
0.00

0
1

1
0
-9

-9

-9

-9

-9

-9

-9

-9

-9

-0
0
-2
0

0
9

0
9
9

0
9
1

2
9
1

Export vs import of other products

250000.00

200000.00
Rs . in c r o r e s

Export of
other
150000.00
products

100000.00 Import of
other
products
50000.00

0.00
1990- 1991- 1992- 1993- 1994- 1995- 1996- 1997- 1998- 1999- 2000-
91 92 93 94 95 96 97 98 99 2000 01
Issues of Export Competitiveness of Select Agro-products
Rice:

• In spite of much favourable domestic resource cost, the nominal

protection co-efficient is marginal which is due to volatile
international prices.

• The domestic supply gap, quality, processing, marketing,

transportation etc., are going to be key factors for sustaining India’s
rice export potential.

Spices:

• Owing to expanding global demand of spices, there is potential for

accelerating Indian spice export but the rising competition would
require concerted efforts.

• The problem of aflotoxin, pesticide residue and low yields are to be

tackled.

Tea:

• India’s export competitiveness as well as share in export of tea is

declining.

• The strategies include promotional measures, joint ventures for tea

blending and marketing and support for importing machinery and
packaging materials.
Coffee:

• There is emergence of new markets in Asia and Eastern Europe and

hence India has to focus on this aspect as well.

• The quality, R&D and post-harvest methods are important to sustain

the growth.

Cashew :

• The emergence of Vietnam and Brazil as exporters, decline in

domestic production of raw cashew and quality stipulations by
importing countries, may make these projections un-achievable.

• The improvement in the processing facility, land development for

additional plantation crop area and removal of legal barriers for such
area expansion are suggested for sustaining the export potential.

Marine Products :

Indian marine products are expected to increase by about 10.2%, per annum,
in the next five years. The marine processing industry is well developed but
to sustain the growth, availability of raw materials for effective production
planning and development of scientifically managed aqua-culture and
brackish water resources are envisaged. The transport and other
infrastructure to support export are also envisaged.
(6) FOOD SECURITY-AN IMPORTANT NON-
TRADE CONCERN

1. The objective of the Agreement on Agriculture (AOA) was to bring about

discipline in one of the most distorted sectors of trade, by, inter alia,
disciplining the unrestricted use of production and export subsidies, as well
as by reducing import barriers, including non-tariff barriers. Thus, the AOA
sought to limit the extent of support granted by individual countries and
attempted to ensure that countries adopt a more liberal policy as far as
agricultural trade was concerned. At the same time, as indicated in the
Preamble, the AOA recognised non-trade concerns (NTCs) of countries.
These NTCs amongst others include food security and the need to protect
the environment.

2. However, this fine balance between trade and non-trade concerns, as

mandated in the Preamble, does not appear to have been fully reflected in
the provisions of the Agreement and consequently in its implementation.
The major thrust of the Agreement appears to be based on the hypothesis
that liberalisation is the panacea of all ills in the agricultural sector. While
this may be tenable from a conventional economic view point, such a
reasoning does not take into account the problems faced by a number of
developing countries, which because of certain underlying constraints, have
to necessarily take into account non trade concerns such as food security,
while formulating their domestic policies. This is particularly true of
developing countries, where a significant percentage of the population is not
only dependent on the agricultural sector for its livelihood, but is also
surviving just around the ‘poverty line’. In such countries a purely market
oriented approach may not be appropriate. Instead, for some countries it may
be necessary to adopt, what we would like to term a ‘market plus approach’,
in which non trade concerns such as the maintenance of livelihood of the
agrarian peasantry and the production of sufficient food to meet domestic
needs are taken into consideration. We, therefore, feel that at this juncture it
is important to closely examine this aspect of the AOA, so as to ensure that
the reform process in the agriculture sector takes into consideration the food
security and other non trade concerns of countries like India.
3. Ensuring food security, that is the access of the population to sufficient
food to meet its nutritional requirements is a basic objective of governmental
policies in agrarian developing countries. Hence, food security issues cover
not only issues related to the availability and stability of food supplies but
also to issues of access to this supply i.e. related to the resources that may be
needed to procure the required quantity of food. It is therefore clear that
issues related to food security are sensitive issues and hence countries in
which a large percentage of population is dependent on this sector, would
like to have a certain degree of autonomy and flexibility in determining their
domestic agricultural policies. These policies would naturally be geared
towards improving productivity, enhancing income levels, reducing
vulnerability to market fluctuations, ensuring stability of prices etc. Inter
alia, this would be achieved through reliability of production and supplies,
so that seasonal variations in access to food are minimal. It is for this reason
that national food production policies have been central to domestic
agricultural policies not just for developing countries, but also for the
developed countries who are net importers of food, as has been brought out
in the papers submitted by Norway and Japan. It is, therefore, clear that in
this sense food security is a legitimate national concern and has been so
recognised by the FAO (Food & Agriculture Organisation). In fact, during
the World Food Summit of 1996 "the importance for food security of
sustainable agriculture, fisheries, forestry and rural development in low and
high potential areas" was explicitly recognised. This recognition of the
importance of food security even for low potential areas clearly underlines a
developmental perspective which goes beyond mere trade concerns, and is,
therefore, germane to the outlook and interest of developing countries.

4. Let us, therefore, examine both the external and internal dimensions of
this problem particularly from the perspective of developing countries.

5. Countries which argue and support rapid liberalisation of the agricultural

sector contend that global food sufficiency would in a way ensure food
security since countries could then produce what they are most competent
and efficient in, while importing the rest of their food requirements. Such an
argument presupposes that all countries would at all times have sufficient
foreign exchange to procure their food requirements internationally. This
assumption is obviously not true since not all developing countries would be
in a position to import food grains, even if these were available at
competitive prices, due to their limited foreign exchange reserves.
Moreover, these countries often face cross sectoral pressures on their
available funds, which further limits their capacity to procure internationally.
This problem is further compounded in case there are unforeseen variations
in the international prices.

6. Similarly, there are various internal constraints which if not appropriately

addressed, would severely limit the capacity of developing countries to
increase domestic production, to at least a certain minimum percentage of
their requirement. Firstly, holdings are small and the majority of farmers
belong to the small and marginal category. This limits any attempts to
introduce mechanised farming and also constrains the adoption of new
technologies unless accompanied by large scale extension programmes.
Consequently, the productivity is low and the total production varies
substantially, since a large percentage of the agricultural sector continues to
be at the mercy of the vagaries of nature. Further, only a small percentage of
what is produced finds itself in the market, the rest being used by the small
and marginal farmers for sustenance or for simple barter. At the same time,
there is increasing pressure on land from non agricultural users, both
because of the rising level of urbanisation as also because of the geographic
spread of industries. If this limitation on the availability of agricultural land
is viewed in the context of the growth in population, which most of the
developing countries invariably face, it would be clear that the only way in
which agricultural growth can be sustained and the objective of food security
attained, would be through increased governmental support in the use of
inputs, particularly in terms of irrigation, electricity, fertilisers, pesticides,
technical know-how, high yielding varieties, infrastructural development,
market support etc.

7. It is, therefore, clear that there are significant external and internal
ramifications of attaining the objectives of food security. While it may not
be possible to immediately ensure that developing countries are able to
produce at least a certain minimum percentage of their annual food
requirement, this is a goal which has to be pursued, particularly in light of
the constraints that developing countries would face in adopting an external
solution to this problem. Recognising the percentage of small farmers in the
agricultural sector of most developing countries, it is clear that a major part
of the financial burden of increased inputs would have to be met through
governmental subsidies. It would need to be recognised that the small farmer
would not be able to meet his principal responsibility without adequate
support from government. Public intervention would therefore be necessary
in order to achieve these national goals.
8. Finally, it needs to be said that agricultural self reliance forms a vital
underpinning for the growth of the GDP of agrarian developing economies
since good agricultural production provides purchasing power to a large
majority of a population, which in turn spurts industrial growth. Self-
sufficiency in food production has therefore a specific developmental
perspective as opposed to a purely commercial perspective. Hence, it is our
view that developing countries need to be provided the requisite flexibility
within the AOA to pursue their legitimate non trade concerns. More
specifically, developing countries need to be allowed to provide domestic
support in the agricultural sector to meet the challenges of food security and
to be able to preserve the viability of rural employment, as different from the
trade distortive support and subsidies presently permitted by the Agreement.
It is therefore important that a differentiation is made between such domestic
support measures which are presently being used to carve out a niche in the
international trade and between those measures which would allow
developing countries to alleviate rural poverty.

9. India is anxious that the AIE process must therefore examine the manner
in which developing countries can be provided additional flexibilities by
appropriate adjustments to the provisions of the AOA, in order to enable
them to pursue their legitimate non- trade concerns. India believes that a
focussed discussion on the subject will contribute to increased awareness to
the non-trade concerns of countries like India, such as food security and
rural employment, and thus enable the WTO Membership to deal with the
subject of continuation of the reform process in the agricultural sector with
sensitivity to these concerns.
(7) CONCLUSION

While AoA is directly concerned with agriculture,there are some other WTO
agreements that have a close bearing on agriculture and influence free and
fair trade in agriculture. In particular, one may mention three agreements :

(1) Agreement On Sanitary and Phyto-Sanitary (SPS) measures

(2)Agreement On Technical Barriers To Trade (TBT).

(3) Trade Related Intellectual Property Rights (TRIPs).

As far as agreement on SPS measures is concerend, Section 2 of the Article

says that SPS measures conforming to international standards shall be
deemed to be necessary for protection of human, animal or plant life or
health. Section 3 of the Article allows countries to fix higher standards than
international standards if there is scientific justification or as a consequence
of consistet risk decisions based on an appropriate risk assessment.
Agreement on TBT aims to encourage the use of international testing and
certifying bodies to avoid discrimination against imports. Agreement on
TRIPs covers seven types of intellecutal property for protection, namely,
patents, copyrights, trademarks, industrial designs, geographical indications,
design layouts of integrated circuts and undisclosed information. As far as
agriculture is concerned, Article 27.3 (b) of the agreement requires members
to provide for protection of plant varies either by patent or by an effective
sui generis system or by any combination thereof.

Agriculture: fairer markets for farmers

The original GATT did apply to agricultural trade, but it contained

loopholes. For example, it allowed countries to use some non-tariff measures
such as import quotas, and to subsidize. Agricultural trade became highly
distorted, especially with the use of export subsidies which would not
normally have been allowed for industrial products. The Uruguay Round
produced the first multilateral agreement dedicated to the sector. It was a
significant first step towards order, fair competition and a less distorted
sector. It was implemented over a six year period (and is still being
implemented by developing countries under their 10-year period), that began
in 1995. The Uruguay Round agreement included a commitment to continue
the reform through new negotiations. These were launched in 2000, as
required by the Agriculture Agreement.
(8) BIBLIOGRAPHY

www.commerce.nic.in
Development Outreach, World Bank Institute, P 10 Volume V, Number
2003
Hindu times
www.wto.org
www.iimm.org
en.wikipedia.org
“Development issues of Indian economy” by “Prof. V.K. BAJPAI”