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Presentation toPresentation to thethe
IPC SeminarIPC Seminar
Challenges facing the Doha Development RoundChallenges facing the Doha Development Round
Trade Negotiations On AgricultureTrade Negotiations On Agriculture
ByBy
MR. DEVI DAYALMR. DEVI DAYAL
Former Secretary Deptt of Banking ,Ministry of FinanceFormer Secretary Deptt of Banking ,Ministry of FinanceGovernment of India.Government of India.
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PART IPART I
Agriculture in IndiaAgriculture in India
Current ScenarioCurrent Scenario
andand
Policy FrameworkPolicy Framework
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Indian Agriculture has made rapid strides sinceIndian Agriculture has made rapid strides since
independenceindependence
From food shortages and importFrom food shortages and import
to selfto self--sufficiency and exports.sufficiency and exports.
From subsistence farmingFrom subsistence farmingto intensive and technology led cultivation.to intensive and technology led cultivation.
Today , India is the front rankingToday , India is the front ranking
producer of many crops in the world.producer of many crops in the world.
Ushered in through theUshered in through the
green, white, blue and yellow revolutionsgreen, white, blue and yellow revolutions
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IndianIndian AgricultureAgriculture-- Some FactsSome Facts
Total Geographical AreaTotal Geographical Area -- 328 million hectares328 million hectares
Net Area sownNet Area sown -- 142 million hectares142 million hectares
Gross Cropped AreaGross Cropped Area 190.8 million hectares190.8 million hectares
MajorCrop Production (1999MajorCrop Production (1999--2000)2000)
RiceRice 89.5 million tonnes89.5 million tonnes
WheatWheat 75.6 million tonnes75.6 million tonnes
Coarse CerealsCoarse Cereals 30.5 million tonnes30.5 million tonnes
PulsesPulses 13.4 million tonnes13.4 million tonnes
OilseedsOilseeds 20.9 million tonnes20.9 million tonnes
SugarcaneSugarcane 29.9 million tonnes29.9 million tonnes
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IndianIndian AgricultureAgriculture-- Some FactsSome Facts
Contributes toContributes to 24%24% of GDPof GDP
Provides food toProvides food to 1Billion1Billion peoplepeople
Sustains 65% of the population : helps alleviate povertySustains 65% of the population : helps alleviate poverty Produces 51 majorCropsProduces 51 majorCrops
Provides Raw Material to IndustriesProvides Raw Material to Industries
Contributes to 1/6Contributes to 1/6thth of the export earningsof the export earnings
One of the 12 BioOne of the 12 Bio--diversity centers in the world with overdiversity centers in the world with over46,000 species of plants and 86,000 species of animals46,000 species of plants and 86,000 species of animalsrecordedrecorded
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IndianAgriculture ScenarioIndianAgriculture Scenario
STRENGTHSSTRENGTHS Rich BioRich Bio--diversitydiversity
Arable landArable land
ClimateClimate
Strong and well dispersedStrong and well dispersedresearch and extension systemresearch and extension system
OPPORTUNITIESOPPORTUNITIES Bridgeable yield cropsBridgeable yield crops
ExportsExports
AgroAgro--based Industrybased Industry
HorticultureHorticulture
Untapped potential in the N.E.Untapped potential in the N.E.
WEAKNESSWEAKNESS Fragmentation of landFragmentation of land
Low Technology InputsLow Technology Inputs
Unsustainable Water ManagementUnsustainable Water Management
Poor InfrastructurePoor Infrastructure
Low value additionLow value addition
THREATSTHREATS Unsustainable Resource UseUnsustainable Resource Use
Unsustainable RegionalUnsustainable RegionalDevelopmentDevelopment
ImportsImports
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Current ConcernsCurrent Concerns
Pressure of the Population on LandPressure of the Population on Land
Skewed distribution of operational holdingsSkewed distribution of operational holdings
Land DegradationLand Degradation
Water BalanceWater Balance
Low level of mechanizationLow level of mechanization
Low FertilizerConsumptionLow FertilizerConsumption
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The First Ever National Agriculture Policy wasThe First Ever National Agriculture Policy was
announced in July 2000. The Policy seeks toannounced in July 2000. The Policy seeks to
overcome these constraints and achieveovercome these constraints and achieve A Growth rate in excess of 4 percent per annum in theA Growth rate in excess of 4 percent per annum in the
agriculture sector.agriculture sector.
Growth that is based on efficient use of resources, andGrowth that is based on efficient use of resources, and
conserves our soil, water , and bio diversity.conserves our soil, water , and bio diversity. Growth with equity, i.e. growth which is widespread acrossGrowth with equity, i.e. growth which is widespread across
regions, and different classes of farmers.regions, and different classes of farmers.
Growth that is demand driven and stabilizes domestic marketsGrowth that is demand driven and stabilizes domestic markets
and maximizes benefits from exports in the face of Globaland maximizes benefits from exports in the face of Global
Challenges.Challenges.
Growth that is sustainable ,technologically , environmentally,Growth that is sustainable ,technologically , environmentally,
and economically.and economically.
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The Policy has indicated a nineThe Policy has indicated a nine--fold package offold package of
policy initiatives to achieve the objectivespolicy initiatives to achieve the objectives
Development of Sustainable agricultureDevelopment of Sustainable agriculture
Food and Nutritional securityFood and Nutritional security
Generation and Transfer of TechnologyGeneration and Transfer of Technology
Improvement of input efficiencyImprovement of input efficiency
Provision of incentives for agricultureProvision of incentives for agriculture
Promotion of Investments in agriculturePromotion of Investments in agriculture
Strengthening of institutional infrastructureStrengthening of institutional infrastructure
Better risk managementBetter risk management
Introduction of Management ReformsIntroduction of Management Reforms
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TARGETSTARGETS
Food Grain Production will be doubled in ten years, so as toFood Grain Production will be doubled in ten years, so as to
make India hunger free .make India hunger free . Special emphasis will be on horticulture production in order toSpecial emphasis will be on horticulture production in order to
achieve a quantum increase.achieve a quantum increase.
Allied sectors like live stock, dairy poultry, fisheries, will beAllied sectors like live stock, dairy poultry, fisheries, will be
promotedpromoted Production of oilseeds and pulses will be raised substantially.Production of oilseeds and pulses will be raised substantially.
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Strategies & Initiatives : Enhancing Value AdditionStrategies & Initiatives : Enhancing Value Addition
-- 98% of fruits and vegetables are sold as fresh products.98% of fruits and vegetables are sold as fresh products.
-- processing accounts for only 7% of agricultural value.processing accounts for only 7% of agricultural value.
-- wastage levels are extremely high.wastage levels are extremely high.
Improved post harvest interventions: price supportImproved post harvest interventions: price support
mechanism, grading, handling, storage, packaging,mechanism, grading, handling, storage, packaging,marketing, processing.marketing, processing.
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Strategies & Initiatives : Enhancing Value AdditionStrategies & Initiatives : Enhancing Value Addition
Draft National Policy on Food Processing prepared.Draft National Policy on Food Processing prepared.
Draft Processed Food Development Act formulated.Draft Processed Food Development Act formulated.
Package of promotional schemes available forPackage of promotional schemes available for
infrastructure development and quality improvement.infrastructure development and quality improvement.
To raise the processing level by 10% , an investment ofTo raise the processing level by 10% , an investment of
approximately Rs 1400 billion required.approximately Rs 1400 billion required.
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Indias International TradeIndias International Trade -- 20012001--0202
500
0
1000
1500
2000
2500
Exports Imports
Agriculture
Non-Agriculture
2 8 9
1 7 3 62 1 4 8
1 2 0
Rs Billions
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Indias Agricultural Export PotentialsIndias Agricultural Export Potentials
Marine ProductsMarine Products
RiceRice
WheatWheat
Condiments and Sp
uces
Condiments and Sp
uces
CashewCashew
TeaTea
CoffeeCoffee
CastorCastor
JuteJute
Fruits and VegetablesFruits and Vegetables-- Onions, Mango, Grapes, Banana,Onions, Mango, Grapes, Banana,Tomato , Potato , Lichchi ,etc.Tomato , Potato , Lichchi ,etc.
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PART IIPART II
Negotiations onWTO AgreementNegotiations onWTO Agreement
OnOn
AgricultureAgriculture
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Agreement on Agriculture (AOA)Agreement on Agriculture (AOA)
AOA and Agreement of Application on Sanitary andAOA and Agreement of Application on Sanitary and
Phytosanitary Measures were negotiated in parallelPhytosanitary Measures were negotiated in parallel
Decision on measures concerning the possibleDecision on measures concerning the possible
negative effects of the reform programme o leastnegative effects of the reform programme o least
developed and net food importing developingdeveloped and net food importing developingcountries also a part of the packagecountries also a part of the package
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Mandated Negotiations under Article 20 ofMandated Negotiations under Article 20 of
AOA for continuation of the reform processAOA for continuation of the reform process
Negotiations to commence one year before the end ofNegotiations to commence one year before the end of
the implementation period i.e. in January 2000, takingthe implementation period i.e. in January 2000, taking
into account:into account:
-- Experience in implementing reduction commitmentsExperience in implementing reduction commitments
-- Effect on world trade in AgricultureEffect on world trade in Agriculture
-- Non Trade concerns, S&D treatmentNon Trade concerns, S&D treatment
-- Further LiberalizationFurther Liberalization
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Two Fold ApproachTwo Fold Approach
Experience in the implementation of theExperience in the implementation of the
Agreement leads us to conclude that basically theAgreement leads us to conclude that basically the
problems can be tackled on two planes, namely;problems can be tackled on two planes, namely;
a)a) Through positive efforts and binding commitments byThrough positive efforts and binding commitments by
Developed Countries in Undertaking substantiveDeveloped Countries in Undertaking substantive
reductions in tariff levels, tariff escalation, tradereductions in tariff levels, tariff escalation, trade
distortive domestic support and elimination of exportdistortive domestic support and elimination of exportsubsidies and tariff peaks,etcsubsidies and tariff peaks,etc
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Two Fold ApproachTwo Fold Approach
b.b. Through specific and targeted S&D provisions within theThrough specific and targeted S&D provisions within the
existing framework of AOA , which would go beyondexisting framework of AOA , which would go beyondlonger transition periods and reduced rates of reduction,longer transition periods and reduced rates of reduction,
keeping in view the developmental objectives inkeeping in view the developmental objectives in
developing countriesdeveloping countries
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Indias Priorities / Recommendations inIndias Priorities / Recommendations in
NegotiationsNegotiations
Domestic SupportDomestic Support Remove ambiguities in the calculation of AMSRemove ambiguities in the calculation of AMS
Empty Blue Box and put a ceiling on all forms of directEmpty Blue Box and put a ceiling on all forms of direct
payments and include these in AMSpayments and include these in AMS
Negative product specific support figures should be allowed toNegative product specific support figures should be allowed to
be adjusted against the positive nonbe adjusted against the positive non--productproduct--specific AMSspecific AMSsupport figuressupport figures
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Indias Priorities / Recommendations inIndias Priorities / Recommendations in
NegotiationsNegotiations
Domestic SupportDomestic Support
Product specific support provided to lowProduct specific support provided to low--income resourceincome resource--
poor farmers should be excluded from AMS calculationspoor farmers should be excluded from AMS calculations
Total domestic support should be brought down below theTotal domestic support should be brought down below the dede
minimisminimis level within a maximum period of three years bylevel within a maximum period of three years by
developed countries and five years by developing countrydeveloped countries and five years by developing countrymembersmembers
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Indias Priorities / Recommendations inIndias Priorities / Recommendations in
NegotiationsNegotiations
Food Security & Development ConcernsFood Security & Development Concerns
Strengthen mechanisms to deal with genuine food securityStrengthen mechanisms to deal with genuine food security
concerns of developing countries through a food securityconcerns of developing countries through a food securityboxbox
Developed country members should not be allowed to use SPSDeveloped country members should not be allowed to use SPS
measures for protectionist purposes by prescribing overlymeasures for protectionist purposes by prescribing overly
stringent trade restrictive SPS measure for denying marketstringent trade restrictive SPS measure for denying marketaccess to developing countriesaccess to developing countries
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Indias Priorities / Recommendations inIndias Priorities / Recommendations in
NegotiationsNegotiations
All measures taken by developing countries for povertyAll measures taken by developing countries for poverty
alleviation from rural development, rural employment andalleviation from rural development, rural employment and
diversification of agriculture should be exempted from anydiversification of agriculture should be exempted from any
reduction commitmentsreduction commitments
MarketAccessMarketAccess
Appropriate level of tariff bindings to be allowed to beAppropriate level of tariff bindings to be allowed to be
maintained by developing cou
ntries as a Special & Differentialmaintained by developing cou
ntries as a Special & DifferentialMeasure , keeping in mind their developmental needs and highMeasure , keeping in mind their developmental needs and high
distortions prevalent in international marketsdistortions prevalent in international markets
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Indias Priorities / Recommendations inIndias Priorities / Recommendations in
NegotiationsNegotiations
Developing country members should be exempt from anyDeveloping country members should be exempt from any
obligation to provide any minimum market access.obligation to provide any minimum market access.
A special safeguard mechanism including a provision forA special safeguard mechanism including a provision for
imposition of quantitative restrictions under specifiedimposition of quantitative restrictions under specified
circumstances to be made available to all developing countriescircumstances to be made available to all developing countries
in case of search in imports or decline in prices etc.in case of search in imports or decline in prices etc.
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Indias Priorities / Recommendations inIndias Priorities / Recommendations in
NegotiationsNegotiations
Low tariff bindings in developing countries as could not beLow tariff bindings in developing countries as could not berationalized in earlier negotiations should be allowed to berationalized in earlier negotiations should be allowed to be
raised to the ceiling bindings for similar category of products,raised to the ceiling bindings for similar category of products,
committed during the Uruguay Roundcommitted during the Uruguay Round
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Indias Priorities / Recommendations inIndias Priorities / Recommendations in
NegotiationsNegotiations
Export CompetitionExport Competition
Bring down excessively high tariffs to moderate levels inBring down excessively high tariffs to moderate levels in
developed countries through an appropriate formuladeveloped countries through an appropriate formula
Tariff reductions for developing countries shouldTariff reductions for developing countries should
commensurate with their developmental needscommensurate with their developmental needs
Abolish TRQs. Restrictions on trade only in the form ofAbolish TRQs. Restrictions on trade only in the form of
tariffs and tariffs onlytariffs and tariffs only
If not possible ,then make their administration transparent , fairIf not possible ,then make their administration transparent , fair
and equitableand equitable
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Status of NegotiationsStatus of Negotiations
Negotiations in agriculture commenced with the first specialNegotiations in agriculture commenced with the first special
session of the Committee on Agriculture held in March 2000session of the Committee on Agriculture held in March 2000
The first phase of the negotiations ended in March 2001The first phase of the negotiations ended in March 2001
India also filed its proposals in the areas of market access,India also filed its proposals in the areas of market access,
food security, domestic support and export subsides & cofood security, domestic support and export subsides & co--sponsored proposals on market access and export subsidiessponsored proposals on market access and export subsidies
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Developed Country PositionsDeveloped Country Positions
EU against fast track approach to liberalizationEU against fast track approach to liberalization
Nordic Countries and Japan for continuation ofNordic Countries and Japan for continuation ofsubsidy regimes in agriculturesubsidy regimes in agriculture
Australia , New Zealand and Canada (ofCairnsAustralia , New Zealand and Canada (ofCairnsGroup) favor a totally market oriented approach andGroup) favor a totally market oriented approach andoppose trade distorting subsidies and protectionistoppose trade distorting subsidies and protectionistregimes of EU and Japanregimes of EU and Japan
US , opposing EU, but not completely with CairnsUS , opposing EU, but not completely with CairnsGroup either, aggressively seeks market access inGroup either, aggressively seeks market access inother WTO member countriesother WTO member countries
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Cairns Group PositionCairns Group Position
Demands elimination of export subsidies andDemands elimination of export subsidies and
domestic subsidies as goals of on going agriculturaldomestic subsidies as goals of on going agricultural
negotiationsnegotiations
Calls for better information and analysis of tariff ratesCalls for better information and analysis of tariff rates
tariff quota administrationtariff quota administration
Supports transparent and targeted S&D forSupports transparent and targeted S&D fordeveloping countriesdeveloping countries
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Indias Objectives / Strategy in theIndias Objectives / Strategy in the
NegotiationsNegotiations
Extend the use of SSGs to all countries and make theiruseExtend the use of SSGs to all countries and make theiruse
more transparentmore transparent
Get rid of special clauses and bilateral commodity specificGet rid of special clauses and bilateral commodity specificarrangementsarrangements
Eliminate discretion in application of SPS standardsEliminate discretion in application of SPS standards
Abolish export subsidies completely within a time frame of 3Abolish export subsidies completely within a time frame of 3
to 5 years. Inclu
de all forms of export su
bsidies in theto 5 years. Inclu
de all forms of export su
bsidies in thecalculation of total subsidiescalculation of total subsidies
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Indias Objectives / Strategy in theIndias Objectives / Strategy in the
NegotiationsNegotiations
Flexibility to pursue our domestic support policies forFlexibility to pursue our domestic support policies for
agriculture to protect our food security and livelihoodagriculture to protect our food security and livelihood
concernsconcerns
Retaining appropriate level of bound tariffs forRetaining appropriate level of bound tariffs for
protecting our farmersprotecting our farmers
Seek additional opportu
nities for increasing ou
rSeek additional opportu
nities for increasing ou
rexportsexports
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DohaMinisterial DeclarationDohaMinisterial Declaration
The long term objective of establishing a fair andThe long term objective of establishing a fair and
market oriented trading system reaffirmedmarket oriented trading system reaffirmed
Need for fundamental reform through strengthenedNeed for fundamental reform through strengthened
rules and specific commitments on support andrules and specific commitments on support andprotection reiteratedprotection reiterated
Comprehensive negotiations sought for affecting:Comprehensive negotiations sought for affecting:
substantial improvements in market accesssubstantial improvements in market access
Reductions leading to eventual phasing out of all formsReductions leading to eventual phasing out of all forms
of export subsidiesof export subsidies
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DohaMinisterial DeclarationDohaMinisterial Declaration
Substantial reduction in trade distorting domesticSubstantial reduction in trade distorting domestic
supportsupport
Special & Differential treatment to be an integral partSpecial & Differential treatment to be an integral part
of the negotiationsof the negotiations
Modalities for further commitments to be finalised byModalities for further commitments to be finalised by
31March 200331March 2003
Comprehensive draft sched
ules to be s
ubmitted by the
Comprehensive draft sched
ules to be s
ubmitted by the55thth Session of the Ministerial ConferenceSession of the Ministerial Conference
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Some Elements of IndianWork ProgrammeSome Elements of IndianWork Programme
Market AccessMarket Access
Tariff line wise analysis required to be undertaken toTariff line wise analysis required to be undertaken to
formalize our position with regard to tariff reductionsformalize our position with regard to tariff reductions
In depth study with regard to the utility and application ofIn depth study with regard to the utility and application of
the special safegaurd mechanism for developing countriesthe special safegaurd mechanism for developing countries
like Indialike India
Formulate our position on Tariff Rate Quotas (TRQs)withFormulate our position on Tariff Rate Quotas (TRQs)witha view to increasing our market access through the samea view to increasing our market access through the same
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Some Elements of IndianWork ProgrammeSome Elements of IndianWork Programme
Domestic Support and Export SubsidiesDomestic Support and Export Subsidies
Review of the Green Box measures to make them moreReview of the Green Box measures to make them more
development orienteddevelopment oriented An analysis of the current level of trade distorting supportAn analysis of the current level of trade distorting support
and subsidies which are required to be disciplined in viewand subsidies which are required to be disciplined in view
of the prevalent distortions in the international marketof the prevalent distortions in the international market
Developing disciplines on export credits ,exportDeveloping disciplines on export credits ,exportguarantees, insurance , etcguarantees, insurance , etc
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Some Elements of IndianWork ProgrammeSome Elements of IndianWork Programme
Special and DifferentialSpecial and Differential provisionsprovisions
Specific modalities under the 3 areas of market access ,Specific modalities under the 3 areas of market access ,
domestic support and export subsidies would need to bedomestic support and export subsidies would need to be
developeddeveloped This would involve development of sound economicThis would involve development of sound economic
justification for seeking either differential rate of reductionjustification for seeking either differential rate of reduction
or specific measures so as to safegaurd food and livelihoodor specific measures so as to safegaurd food and livelihood
security objectives in developing countries agriculturalsecurity objectives in developing countries agricultural
sectorsector
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THANK YOU