STRESS ON REDUCING DISTORTIONS IN WORLD AGRICULTURAL TRADE
INTERNATIONAL COLLOQUIUM ON WTO NEGOTIATIONS ON AGRICULTURE
Date : 21 Dec 2000
Location : New Delhi
The two-day International Colloquium on WTO Negotiations on Agriculture got underway with participants including India stressing the need to remove distortions in the world agricultural trade which have persisted despite the Uruguay Round Agreement on Agriculture aiming at reducing the level of trade distorting support that members could provide. In a presentation on Domestic Support in the context of WTO Negotiations on Agriculture at the Colloquium organised by the Indian Council for Research on International Economic Relations (ICRIER) here, Shri Nripendra Misra, Special Secretary, Ministry of Commerce and Industry, pointed out that while it was anticipated that the disciplines brought about by the Agreement on Agriculture would be beneficial for agricultural producers in the developing countries, the Agreement, in fact, had institutionalised the disparity between the developed and developing countries by allowing the high subsidising countries to maintain 80% of their base level aggregate measure of support (AMS) while prohibiting the low income countries from going beyond the minimum 10 per cent level of their value of agricultural production. The methodology of calculating the AMS also left much to be desired with AMS being computed on a product-specific basis while reduction commitments applied to the aggregate amount, thereby permitting over subsidisation of sensitive commodities to the detriment of exports from developing countries. Reform in agriculture must make a distinction between the welfare measures of subsistence economies and direct payment to farmers to sustain a level of farm income in the developed countries, he said, emphasising that "the quest for food and livelihood security for a large agrarian economy like India has ramifications beyond the straight line principles of market forces. Subsidised farm commodities from abroad could lead to marginalisation of the farm community".
Dr. Geoffrey Raby, Australia's Ambassador and Permanent Representative to the WTO in Geneva; Mrs. Puangrat Asavapisil, Deputy Director General, Department of Business Economics, Bangkok; and Mr. Masanori Hayashi, Director General, International Affairs Department, Ministry of Agriculture, Forestry & Fisheries, Tokyo made presentations on the issues of market access, export competition and non-trade concerns in the context of WTO Agreement on Agriculture, followed by discussions in which participants from number of countries including European Union (EU), Canada and others participated. Dr. Raby described export subsidies as the "most egregious distortion in the world agricultural market" and said that there was widespread international pressure to eliminate agricultural export subsidies from a wide range of countries including groupings such as the Cairns group, APEC, the Group of 77 developing countries, G-15 and countries negotiating the Free Trade Area of the Americas. Achieving elimination would be an important step towards finally ending the discrimination against agriculture in the GATT/WTO system, he said. Export subsidies in rich countries, he argued, undermined food security strategies of the developing countries by constraining domestic production through depressed world prices, unfair competition in foreign and local markets and volatility in world markets. He also cited case studies indicating the damage caused by export subsidies to the developing counties' agriculture.
The Sessions on Market Access, Domestic Support and Export Competition were chaired by Mr. Frank Wolter, Director, Agriculture & Commodities Division, WTO Secretariat, Geneva, Shri A. Hoda, Professor, ICRIER and former Deputy Director General of the WTO and Dr. Ashok Gulati, NABARD Professor, Institute of Economic Growth, Delhi, respectively. Negotiations on agriculture were resumed earlier this year as mandated in the WTO Agreement on Agriculture and the Colloquium is aimed at generating impulses that could carry the negotiations forward.