WTO AGREEMENT ON AGRICULTURE —
A BACKGROUND PAPER

Under Article 20 of the Agreement on Agriculture (AOA) which emerged from the Uruguay Round of Multilateral Trade Negotiations, the review of the Agreement is mandated one year before the end of the six-year implementation period of the Agreement i.e., 2000, with the objective of continuing the process of reform in the world trade in agriculture. The negotiations have commenced in March this year and in accordance with the time-table set for the first phase of negotiations, all WTO member nations are expected to submit their proposals by 31 December, 2000. In the process of preparations for evolving India's negotiating position on agriculture, the government has initiated regional consultations at various places, besides national level consultations with a view to generating greater awareness of the issues and to receive views and suggestions which would facilitate a consensus regarding India's position. In its continuing effort to promote transparency, the Ministry of Commerce & Industry (Department of Commerce) has already decided to put on its website a series of background papers on important WTO related issues. The second in the series of such background papers relates to the WTO Agreement on Agriculture and can be accessed at: http://commin.nic.in. You are invited to e-mail your comments and suggestions to: abhatia@ub.delhi.nic.in which would serve as useful inputs in evolving our stand in the ongoing negotiations under the WTO Agreement on Agriculture.

Introduction

Salient features

India's commitments

Mandated negotiations

State of Play

Likely issues for negotiations and suggestions for a possible Indian stand

Annexures:

Food security an important non-trade concern

Issues of interest to developing countries

INTRODUCTION

After over 7 years of negotiations the Uruguay Round multilateral trade negotiations were concluded on December 15,1993 and were formally ratified in April 1994 at Marrakesh,Morrocco. The WTO Agreement on Agriculture was one of the many agreements which were negotiated during the Uruguay Round.

The implementation of the Agreement on Agriculture started with effect from January 1, 1995. As per the provisions of the Agreement, the developed countries would complete their reduction commitments within 6 years, i.e., by the year 2000, whereas the commitments of the developing countries would be completed within 10 years, i.e., by the year 2004. The least developed countries are not required to make any reductions.

The products, which are included within the purview of this agreement are what are normally considered as part of agriculture except that it excludes fishery and forestry products as well as rubber, jute, sisal, abaca and coir. The exact product coverage can be accessed in the legal text of the agreement from the web site http://www.wto.org

SAILENT FEATURES

The WTO Agreement on Agriculture contains provisions in 3 broad areas of agriculture and trade policy: market access, domestic support and export subsidies.

Market Access

This includes tariffication, tariff reduction and access opportunities. Tariffication means that all non-tariff barriers such as quotas, variable levies, minimum import prices, discretionary licensing, state trading measures, voluntary restraint agreements etc. need to be abolished and converted into an equivalent tariff. Ordinary tariffs including those resulting from their tariffication are to be reduced by an average of 36% with minimum rate of reduction of 15% for each tariff item over a 6 year period. Developing countries are required to reduce tariffs by 24% in 10 years. Developing countries as were maintaining Quantitative Restrictions due to balance of payment problems, were allowed to offer ceiling bindings instead of tariffication.

Special safeguard provision allows the imposition of additional duties when there are either import surges above a particular level or particularly low import prices as compared to 1986-88 levels.

It has also been stipulated that minimum access equal to 3% of domestic consumption in 1986-88 will have to be established for the year 1995 rising to 5% at end of the implementation period.

Domestic support

For domestic support policies, subject to reduction commitments, the total support given in 1986-88,measured by the total Aggregate Measurement of Support (AMS) should be reduced by 20% in developed countries (13.3% in developing countries). Reduction commitments refer to total levels of support and not to individual commodities. Policies which amount to domestic support both under the product specific and non-product specific categories at less than 5% of the value of production for developed countries and less than 10% for developing countries are also excluded from any reduction commitments. Polices which have no or at most minimal trade distorting effects on production are excluded from any reduction commitments (Green Box-Annex 2 of the Agreement on Agriculture - http://www.wto.org). The list of exempted green box policies includes such policies which provide services or benefits to agriculture or the rural community, public stock holding for food security purposes, domestic food aid and certain de-coupled payments to producers including direct payments to production limiting programmes, provided certain conditions are met.

Special and Differential Treatment provisions are also available for developing country members. 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. Developing countries are permitted untargeted subsidised food distribution to meet requirements of the urban and rural poor. Also excluded for developing countries are investment subsidies that are generally available to agriculture and agricultural input subsidies generally available to low income and resource poor farmers in these countries.

Export Subsidies

The Agreement contains provisions regarding member's commitment to reduce Export Subsidies. Developed countries are required to reduce their export subsidy expenditure by 36% and volume by 21% in 6 years, in equal instalment (from 1986-1990 levels). For developing countries the percentage cuts are 24% and 14% respectively in equal annual installment over 10 years. The Agreement also specifies that for products not subject to export subsidy reduction commitments, no such subsidies can be granted in the future.

 

INDIA’S COMMITMENTS

Market Access

As India was maintaining Quarantine 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. The only commitment India has undertaken is to bind its primary agricultural products at 100%; processed foods at 150% and edible oil at 300%. Of course, for some agricultural products like skimmed milk powder, maize, rice, spelt wheat, millets etc. which had been bound at zero or at low bound rates, negotiations under Article XXVIII of GATT were successfully completed in December, 1999 and the bound rates have been raised substantially.

 

Domestic Support

India does not provide any product specific support other than market price support. During the reference period (1986-88), India had market price support programmes for 22 products, out of which 19 are included in our list of commitments filed under GATT. The products are: rice, wheat, bajra, jawar, maize, barley, gram, groundnut, rapeseed, toria, cotton, soyabean, (yellow), soyabean (black), urad, moong, tur, tobacco, jute and sugarcane. The total product specific AMS was (-) Rs. 24,442 crores during the base period. The negative figure arises from the fact that during the base period, except for tobacco and sugarcane, international prices of all products was higher than domestic prices, and the product specific AMS is to be calculated by subtracting the domestic price from the international price and then multiplying the resultant figure by the quantity of production.

Non-product specific subsidy is calculated by taking into account subsidies given for fertilisers, water,seeds, credit and electricity. During the reference period the total non- product specific AMS wasRs. 4581 crores. Taking both product specific andnon-product specific AMS into account, the total AMS was (-) Rs.19,869 crores i.e., about (-) 18% of the value of total agricultural output.

Since our total AMS is negative and that too by a huge magnitude, the question of our undertaking reduction commitment did not arise. As such, we have not undertaken any commitment in our schedule filed under GATT. The calculations for the marketing year 1995-96 show the product specific AMS figure as (-) 38.47% and non-product specific AMS as 7.52% of the total value of production. We can further deduct from these calculations the domestic support extended to low income and resource poor farmers provided under Article 6 of the Agreement on Agriculture. This still keeps our aggregate AMS below the de minimis level of 10%.

India's notifications on AMS are available at website address: www.wto.org/wto/online/ddf.htm.

Export Subsidies

In India, exporters of agricultural commodities do not get any direct subsidy. The only 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 Act and this is also not one of the listed subsidies as the entire income from Agriculture is exempt from Income Tax per se. (b) subsidies on cost of freight on export shipments of certain products like fruits, vegetables and floricultural products. We have, in fact, indicated in our schedule of commitments that India reserves the right to take recourse to subsidies (such as, cash compensatory support) during the implementation period.

 

MANDATED NEGOTIATIONS

Article 20 of the Agreement on Agriculture (http://www.wto.org) mandates that negotiations for continuing the reform process in agriculture will be initiated one year before the end of the implementation period. As the implementation period for developed countries culminates at the end of the year 2000, the negotiations on the Agreement on Agriculture have begun this year.

These negotiations are to be conducted in special sessions of the WTO Committee on Agriculture at Geneva. The following are to be the broad parameters for carrying out negotiations:

a. Experience of member countries in implementation of reduction commitments till date.

b. The effects of reduction commitments on World Trade in Agriculture.

c. Non-trade concerns, special and differential treatment to developing country members and the objectives of establishing a fair and market oriented agricultural trading system are the other objectives of the negotiations.

d. What further commitments are necessary to achieve the long term objectives of the Agreement.

During extensive deliberations in the WTO Committee on Agriculture and in the General Council, member countries have agreed to broadly adhere to the mandate of Article 20 of the Agreement. Members have also agreed to submit their proposals by the end of this year.

 

STATE OF PLAY

Through formal and informal discussions in the Committee on Agriculture, the WTO membership has been debating on various issues of concern to them. The demarcation in various groups of countries has now become clearer. The EU, certain Nordic countries like Norway and Japan are on the one side, wanting to continue their subsidy regimes in agriculture, whereas the Cairns group of countries who are naturally endowed agriculture producers, are totally opposed to the trade distorting subsidies and the protectionist regime being practiced by EU and Japan. The United States, though opposing EU and not completely with the Cairns group either, forms the third dimension. The developing countries are somewhere in the middle, not having decided whether or not to form a 4th dimension.

The Cairns group of countries, votaries of unrestricted trade, comprises a group of 18 major agricultural exporting countries. They have listed the elimination of export subsidies and domestic subsidies as goals of the ongoing agricultural negotiations at the World Trade Organisation. They have also called for better information and analysis of tariff rates, quota administration, export subsidies, domestic support programmes and market access as well as members position on bio-technology and Genetically Modified Organisms.

The U.S agenda for negotiations would be driven by further trade liberalisation in the agricultural sector, which would benefit US interests. There is likely to be an emphasis on global tariff reduction on agricultural products, greater transparency and improved disciplines on state trading enterprises, proper implementation of tariff rate quotas and greater disciplines on bio-technology, as well as, further strengthening of the sanitary and phytosanitary agreement.

The European Union is more vulnerable to attack in the WTO on the issue of its distortion of markets through domestic subsidisation of agriculture. In the context of further liberalisation, EU would strongly defend its "Blue Box" policies. They feel that in case Blue Box is to be abolished, the WTO contracting parties will have to agree to change of the present rules in the Agreement on Agriculture. The EU would be pressing at the international level for improvements in food safety and food quality standards as well as in supporting environmental and social sustainability. It is, thus, apparent that EU intends to maintain protection of its agricultural industry at the highest possible level while maximising concessions to be gained in other country markets.

Japan highlights the importance of the multifunctional role of agriculture, food security and a fair balance between rights and duties of importing and exporting countries from the standpoint of a net importer of farm products.

 

India's position has been articulated in WT/GC/W/152 available at the web site http//www.wto.org. Briefly, it has been emphasised that Article 20 of the Agreement adequately reflects both the emphasis and context in which these negotiations should be entered upon. The most important aspect of the negotiations would be to address implementation problems up front, in the areas of market access, domestic support, export subsidy, notification requirements & technical assistance. The inadequate implementation of special & differential provisions in the above mentioned areas is a cause of particular concern to us.

 

India has suggested that an in-depth analysis and assessment of the effect of the Uruguay Round on the trade of developing countries should be an essential pre-requisite of any negotiations.

We have also drawn attention to the peculiar agricultural scenario obtaining in large agrarian economies like India, where rural employment and production of sufficient food to meet the domestic requirements are of paramount importance. Thus, for addressing food security issues, a certain degree of autonomy and flexibility is required by developing countries in their domestic policies. These concerns have been articulated not with the intention of creatinga negotiating base but with the hope that the forthcoming negotiations would provide us adequate opportunity to pursue our legitimate trade and non- trade concerns.

LIKELY ISSUES FOR NEGOTIATIONS AND POSSIBLE INDIAN STAND

Market Access:

i) High agricultural tariffs and tariff peaks being applied by some WTO members are significant barriers to meaningful market access opportunities. We would have to very carefully articulate it as India will need to have a reasonable level of tariff protection for taking care of its food security and rural employment concerns.

ii) Tariff escalation is another factor, which discourages developing countries from diversifying from primary commodity production to processed value added agricultural products for export purposes.

iii) The operation of tariff rate quotas in a non-transparent and complex manner limits trade opportunities of new suppliers, particularly from developing countries. In this context, thus, guidelines on TRQ allocation and administration would be sought so as to enhance market access opportunities. It may be desirable to press for the elimination of tariff rate quota system itself.

iv) Certain aspects of sanitary and phytosanitary measures which limit market access particularly for exports of developing countries would also figure prominently in the forthcoming negotiations.

v) The special safeguard provisions, which are available to only a few Member countries, would also be coming up for review and India would press for its availability to all developing countries.

Domestic Support:

i) During the course of implementation of obligations/commitments, a number of member countries particularly from the developing world have experienced difficulty in calculating and notifying their aggregate measurement of support (AMS) on account of the following factors:-

a) Financial/resource constraints limit the capacity of most developing countries to provide support to their agricultural sector even upto the de minimis level.

b) Lack of clarity in the agreement with regard to the treatment of negative AMS and "excessive inflation", reduces the flexibility provided to developing countries during the Uruguay Round to address their domestic policy concerns.

Such implementation issues would require clarification during the current negotiations.

ii) The 'Green Box' should be revisited for a further tightening of criteria as it currently incorporates various provisions for support, many of which are not non-trade distorting. Moreover, as it is currently designed, it is not of much assistance to developing countries as it does not reflect their support programmes.

iii) The ‘Blue Box’ measures which refer to direct payments to farmers under production limiting programmes which are currently exempt from AMS reduction commitments, should either be totally dispensed with or alternatively should be subject to reduction commitments.

iv) Ways and means to incorporate increased flexibility in the level and use of de minimis support would also be discussed.

 

Export Subsidies:

i) Export subsidies are universally acknowledged to be the single most trade distortive impact in agriculture because of their potential of displacing developing country exports. There would be a strong demand for a complete outlawing of export subsidies. India would also press for it. However, as long as the export subsidies are permitted to be given by any country above the de minimis limit provided under the WTO's Subsidies and Countervailing Measures agreement, India should also have right to give export subsidies upto an appropriate level.

ii) Establishment of disciplines in the field of export credits, guarantees and deferred payments which have a negative effect on prices and competition in the world agricultural market, would be insisted and India would like it to be also included under the disciplines of Export Subsidies.

iii) On account of ambiguity in the existing language of the Agreement on Agriculture, certain countries are resorting to 'rolling over of export subsidies’. This practice would need to be suitably addressed as it amounts to negation of reduction commitments.

Non Trade Concerns:

The Non Trade Concerns (NTC’s) including food security and the need to protect the environment, alluded to in Article 20 of the Agreement on Agriculture would be taken into account during negotiations.

Food Security for India is not only availability of sufficient food but also adequate means to procure the same. Eminent agricultural economists and scientists like Dr. Swaminathan also believe that food security is economic access to food. Accordingly this has ramifications for employment and livelihood. For developing countries like India which are still grappling with the twin problems of poverty and unemployment, the production of food and economic access to it are primary objectives. As opposed to this certain developed countries are advocating multifunctional character of agriculture which essentially signifies that agriculture has functions other then providing food and fibre and also includes the protection of evironment and maintaining the economic viability or rural areas. Viewed against the needs of developing countries concerns about the maintenance of rural landscape appear to be hollow. Any attempts to try and equate the two different scenarios and continue heavy subsidisation of agriculture would be resisted. The concept of multificationality needs to the examined from the perspective of developing countries. Here, we would like to highlight the fact that the non-trade concerns of devloped countries and those of developing countries differ not only in content but in priority also.

For countries like India, multifunctionality of agriculture is best mainfested in its ramifications in areas such as food security, employment and the elimination of poverty in rural areas. Moreover, these issues are neither emotive nor undefined but are practical and harsh realities which decision makers have to confront when addressing issues of agricultural policies. The need to provide employment opportunities in pre-dominantly rural agrarian areas is one of the main NTCs which India would like to see addressed.

Biotechnology:

Biotechnological inventions are increasingly affecting agricultural production and trade. New genetically engineered varieties of crops have increased productivity and are more pest resistant. This has important ramification for increasing productivity which is of central concern to almost all developing countries. To this extent, we would support carefully controlled use of biotechnology in agriculture. At the same time, there are environmental concerns relating to biotechnology. It is feared that Genetically Modified Organisms (GMOs), not having been fully tested for their effect on human health or the environment, should be treated as a class apart. There are also fears that new technologies like the so called 'terminator gene' could imbalance the ecosystem if it spreads beyond controlled production areas.

A concrete country position needs to be evolved in this regard.

Strengthening of the Special &

Differential Treatment:

Special & Differential Treatment accorded to developing countries under the Uruguay Round would be another area of importance to developing countries. These special provisions were designed to take into account the constraints faced by many developing countries in taking advantage of trading opportunities due to structural problems like inadequate infrastructure, lack of resources etc. The existing imbalance and problems of implementation of the agreement would be a high priority item in the next round.

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Annexures

 

FOOD SECURITY-AN IMPORTANT NON-TRADE CONCERN

(Informal Paper by India)

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.

 

ISSUES OF INTEREST TO DEVELOPING COUNTRIES

(Informal Paper by India)

India welcomes the papers submitted by Pakistan, Peru and the Dominican Republic (AIE/6) and the paper submitted by Cuba (AIE/12) on the issues of interest to developing countries. We would also like to thank the Secretariat for their paper on the special and differential (S&D) treatment provisions relating to the AOA (AIE/S6) and the studies on the implementation and impact of the AOA on developing countries (AIE/S7). These papers provide extremely useful factual data in the context of the issues which have been highlighted by delegations regarding the S&D provisions for developing countries.

1. India would like to reiterate the importance that it attaches to the special and differential treatment provisions as provided for in the AOA. Since we are in a process, which we hope will help to clarify some of the issues which are likely to be deliberated upon during the new round of negotiations, it would not be out of context to recapitulate some of the concerns which developing countries had during the UR and which were sought to be allayed by the S&D provisions.

2. As is well known a large number of developing countries are predominantly agrarian countries where a very large percentage of the population is dependent on agriculture for its livelihood. While in the initial years the main concern of these Members was to ensure food sufficiency, this concern, once fulfilled, gradually evolved into a concern of finding markets for their agricultural surpluses, so as to ensure the continued provision of agricultural livelihood to this large population. During the UR these concerns got manifested into two broad areas. The first of these broad provisions related to domestic support which allowed developing countries to provide assistance, whether direct or indirect, to encourage agricultural production as an integral part of the overall objective of rural development. The second area related to the market access, where it was felt that there was a need to improve access for developing country Members by improving both the opportunities and terms of access for agricultural products of interest to these Members.

3. These two very broad aspects were sought to be translated in to specific provisions for the developing countries. As highlighted in the Secretariat paper AIE/S6 there are five broad areas where special and differential provisions have been provided for in the AOA. These include the following, which in our view merit detailed deliberations:

i. market access;

ii. food security, with specific reference to net food importing countries:

iii. domestic support commitment;

iv. export subsidy commitment; and

v. notification requirements and technical assistance.

1. All these five areas need to be considered in detail during the course of this informal process of analysis and information exchange since they have important ramifications for developing countries. For example in the context of the improved market access which the Agreement had sought to provide to developing countries, India would like to draw attention to the first special and differential treatment provision highlighted in the Secretariat doc. No. AIE/S6. The preamble of the Agreement specifically mandates developed countries to provide greater opportunity and market access to the agricultural products of interest to developing countries. Unfortunately, however, the status of implementation as far as this provision is concerned is not totally clear from the information provided in the Secretariat paper. Members have already highlighted some of the specific areas where we need additional information to correctly evaluate the impact of the Uruguay Round. We would like to highlight one specific area where we need certain clarifications. On page 2 of the Secretariat paper AIE/S6 it has been indicated that there has been a "greater-than-average reduction in tariffs on products of interest to developing countries". The factual situation would perhaps have been clearer if figures relating to specific products had been provided. We no doubt agree that compiling data for all products may not be possible but it would be helpful if this committee could analyse the post-UR status for at least some products of interest to developing countries. In this context, we would like to draw attention to a World Bank Policy Research Working Paper titled "Agricultural Trade Liberalisation in the UR", in which it has been indicated that the post-UR base tariffs of a number of sensitive commodities in many industrialised countries are higher than the actual tariff equivalents of all border measures which existed in 1986-88. For instance, for rice, which is of particular interest to India, the World Bank had calculated that the tariff differential for a particular group of countries had increased by as much as 207%. It would therefore be helpful if the Secretariat could perhaps provide additional data as far as some specific products are concerned, since this would help us to better analyse the impact of the AOA on developing countries.

2. Similarly issues of food security also need to be adequately addressed. The preamble to the Agreement specifically highlights the need for Members to take into account non trade concerns such as food security. While this term has been extensively used in the past, we are not entirely sure whether the objectives relating to food security which have so clearly been spelt out in the preamble, have been met. In this context it may be mentioned that it was in the Bali Declaration of the Non-Aligned Movement that an attempt was made, perhaps for the first time, to define food security. The Declaration recognised that in spite of substantial increase in the world’s food output, the number of people suffering from hunger and malnutrition had increased in many developing countries. India therefore feels that it is extremely important that one of the goals of agricultural trade liberalisation remains, the achievement of the objective of food security. It would be perhaps too simplistic to assume that agricultural liberalisation would by itself be able to overcome the problem of food security. Free trade in agriculture is not without its long term social and economic ramifications. India would therefore like to suggest that it would help to clarify Member’s perception, if during this process of analysis and exchange of information the Committee consider certain specific examples where agricultural liberalisation may have had some undesirable effects, specially from the point of food security. This would help identify those areas, policies and practices which may have had such an effect and which the impending round of negotiations would provide an opportunity to rectify.

3. Issues relating to domestic support commitments, export subsidies, notification requirements and technical assistance also need to be similarly examined. A good way would be to encourage developing countries to submit papers on these issues. However, it may be necessary for the Secretariat to provide technical assistance to these delegations so that they can appropriately organise their country experiences in the form of submission papers.

4. In this context we also support the suggestion made earlier, that organisations like FAO, UNCTAD, WORLD BANK, etc. which have done some excellent work in this area are invited to make general contributions on issues of interest to developing countries, particularly regarding the implementation and impact of the Agreement on Agriculture. These contributions could be in the form of papers which the Secretariat could circulate to Members. The relevant organisations could then be invited to a special meeting of the AIE process when their papers can be taken up for consideration.

5. We have highlighted only some of the issues of interest to developing countries. As evident there are a number of other critical areas and issues which need to be addressed during the course of the Analysis and Information Exchange process. Some of these we have listed in para 3 above. Others have been identified in the papers submitted by Pakistan, Peru, Dominican Republic and Cuba. This list is obviously not exhaustive. We would therefore suggest that as the Committee deliberates on the special and differential provisions, an evolving check-list of issues of interest to developing countries is prepared. This would help focus further work on special and differential treatment in the context of market access, food security, domestic support, notification requirements, special safeguards and technical assistance.

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WTO News Letter Jun-July