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A moment comes, rarely in history, when we step out from the old to the new, when an age ends, and when the soul of a nation, long suppressed, finds utterance.

wto and indian agriculture

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Page 1: wto and indian agriculture

A moment comes, rarely in history, when we step out from the old to the new, when an age ends, and when the soul of a nation,

long suppressed, finds utterance.

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• General Agreement on Tariffs and Trade• GATT was formed in 1947 and lasted until

1994 • was replaced by the World Trade

Organization• On 1 January, 1948 the agreement was signed

by 23 countries.• GATT held a total of 8 rounds.

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• Uruguay Round - 1986-1993 The Uruguay Round began in 1986. It was the

most ambitious round to date, hoping to expand the competence of the GATT to important new areas such as services, capital, intellectual property, textiles, and agriculture. 123 countries took part in the round.

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• World Trade Organization• The WTO was born out of the General

Agreement on Tariffs and Trade (GATT).• Headquarters : Geneva, Switzerland• Formation : 1 January 1995• Membership : 153 member states• Budget : 163 million USD


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• It is an international organization designed to supervise and liberalize international trade.

• The WTO has 153 members, which represents more than 95% of total world trade.

• WTO cooperate closely with 2 other component IMF and World Bank.

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• WTO is to ensure that global trade commences smoothly, freely and predictably.

• Transparency in trade policies.

• Work as a economic research and analysis centre.

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• To create economic peace and stability in the world through a multilateral system based on consenting member states, that have ratified the rules of the WTO in their individual countries as well.

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GATT• It was ad hoc & provisional.

• It had no provision for creating an organization.

• It allowed contradictions in local law & GATT agreements.

WTO• It is permanent.

• It has legal basis because member nations have verified the WTO agreements.

• More authority than GATT.

• It doesn't allow any contradictions in local law .

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• Agriculture in India has a long history dating back to ten thousand years.

• Today, India ranks second worldwide in farm output.

• Agriculture accounted for 16.6% of the GDP in 2007, employed 60% of the total workforce and despite a steady decline of its share in the GDP, is still the largest economic

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• Yields per unit area of all crops have grown since 1950 due to application of modern agricultural practices and provision of agricultural credit and subsidies since Green revolution in India.

• However, international comparisons reveal that the average yield in India is generally 30% to 50% of the highest average yield in the world.

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• The Indian Agricultural Research Institute (IARI), established in 1905, was responsible for the research leading to the "Indian Green Revolution" of the 1970s.

• The Indian Agricultural Statistics Research Institute develops new techniques for the design of agricultural experiments and specializes in statistical techniques for animal and plant breeding.

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The low productivity in India is a result of the following factors:

• Overregulation of agriculture has increased costs, price risks and uncertainty.

• Government intervenes in labour, land, and credit markets. India has inadequate infrastructure and services

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• Illiteracy, general socio-economic backwardness, slow progress in implementing land reforms .

• Inadequate or inefficient finance and marketing services for farm produce.

• The average size of land holdings is very small due to land ceiling acts and in some cases, family disputes.

• Such small holdings are often over-manned, resulting in disguised unemployment and low productivity of labour.

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• Introduction. After over 7 years of negotiations the Uruguay

Round multilateral trade negotiations were concluded on December 1993 and were formally ratified in April 1994 at Marrakesh, Morocco.

• The WTO Agreement on Agriculture was one of the main agreements which were negotiated during the Uruguay Round.

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• The WTO Agreement on Agriculture contains provisions in 3 broad areas of agriculture.

1. Market access.2. Domestic support.3. Export subsidies.

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Market access.

• This includes tariffication, tariff reduction and access opportunities.

• Tariffication means that all non-tariff barriers such as...

1. quotas.2. variable levies.3. minimum import prices.4. discretionary licensing.5. state trading measures.

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• For domestic support policies, subject to reduction commitments, the total support given in 1986-88, measured by the Total Aggregate Measure of Support (total AMS).

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• The Agreement contains provisions regarding members commitment to reduce Export Subsidies.

• Developed countries are required to reduce their export subsidy expenditure by 36%.

• For developing countries the percentage cuts are 24%.

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Special and Differential Treatment

1. These include purchases for and sales from food security stocks at administered prices provided that the subsidy to producers is included in calculation of AMS.

2. Developing countries are permitted untargeted subsidised food distribution to meet requirements of the urban and rural poor.

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• As India was maintaining Quantitative Restrictions due to balance of payments reasons(which is a GATT consistent measure), it did not have to undertake any commitments in regard to market access.

• India does not provide any product specific support other than market price support.

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• In India, exporters of agricultural commodities do not get any direct subsidy.

Indirect subsidies available to them are in the form of-:• (a) exemption of export profit from income tax under

section 80-HHC of the Income Tax • (b) subsidies on cost of freight on export shipments of

certain products like fruits, vegetables and floricultural products.

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• India’s basic objectives in the ongoing negotiations are:

• (a) To protect its food and livelihood security concerns and to protect all domestic policy measures taken for poverty alleviation, rural development and rural employment.

• (b) To create opportunities for expansion of agricultural exports by securing meaningful market access in developed countries.

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• Except in rice market ,India is negligible force in global market.

• Domestic subsidies of rich nation will not effect India.

• Many Indian products are cost effective in domestic market.

• So, no fear of cheap import flooding Indian market.

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It will be “just” to highlight one issue each where the RICH countries and poor countries need to be honest.

Let us be honest to understand that dominance of politics over economics and fair play will never render justice.

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• “With malice toward none ,charity for all with firmness in right as god has given us to see the right, let us strive on to achieve adjust and prosperous nation among all other nation”

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