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Uruguay Round on reviewing reforms process -- `Agriculture can't be left to markets alone'

G. Srinivasan

NEW DELHI, Sept. 18

IN the ongoing mandated review of the Uruguay Round Agreement on Agriculture (AoA) for continuing the reform process, India has categorically said that in countries where agriculture is the mainstay, ``it would not be possible to accept that the agricult ure sector could be treated in the same manner as other sectors in the WTO''.

One solution, namely free-trade and market-based agricultural systems, could not solve the problems that these countries were facing, the Indian representative said at the recent Geneva meeting of the WTO, adding that ``agriculture, for the developing co untries, is too serious a matter to be left to the markets alone to determine''.

India's preliminary views presented recently in Geneva are in the run-up to a stock-taking exercise scheduled to be held in March 2001. Already two rounds of meeting were held in March and June, with two more in September and November, plus an additional session envisaged ahead to the March 2001 meeting.

Amplifying its concern on AoA, India pointed out that given the entrenched distortions in the international farm products market, the livelihood and income entitlement of farmers in developing countries need to be safeguarded from unfair competition at l east in the medium-term.

Therefore, it said, ``certain degree of protection in terms of moderately high-tariff levels and special safeguard clause are a must for sustainable agricultural development in developing countries''.

At the June meeting, the Indian representative said that based on specific findings and lessons learnt during the implementation period of the existing agreement, India would formulate its initial proposals and submissions and present them to the committ ee in due course and by so doing, would ``look forward to constructive and positive negotiations for establishing a fair, equitable and market-oriented agricultural trading system, which is consistent with the food security and rural employment needs of developing countries like India''.

Pointing out that the implementation of the agreement was expected to effect a structural change in the world foodgrains market with reduction commitments by developed world leading to a shift in cereal production from highly-subsidised regions to low an d non-subsidised regions, India noted that empirical evidence corroborated that there ``has not been much change in the pattern of world cereals production and exports''.

India said the persistence of the high domestic support to agriculture in many advanced countries was encouraging overproduction at high cost to their economies. The export subsidies used to dispose of excess supplies in these countries further artificia lly depressed the prices of such commodities in the global markets, ``wiping off the competitiveness and comparative advantage of developing countries''.

India said, ``the continuation of these subsidies is undermining their trust and confidence in the fairness of the international trading regime and prevents them from undertaking further liberalisation''.

The opening of the markets in the post-UR phase, has been seen mainly in the developing countries while insignificant gains have been made in getting market access in developed countries.

While the share of developing countries' exports to destinations other than North America was 43 per cent in 1998, up from 39.5 per cent in 1990, the growth in exports to other developed countries has been ``discouraging''.

Among the three major developed regions, Western Europe is the most important market for agricultural exports from developing countries, although its share in total agricultural exports from developing countries declined from 30.5 per cent in 1990 to 28 per cent in 1998. Japan imported less from developing countries with its share also sliding from 14.5 per cent in 1990 to 11.5 per cent in 1998.

India said the AoA, which scored success in defining rules for global trade in agriculture, had little to show in terms of effective market opening for developing countries and the gains that the developing world anticipated did not occur.

Market access to developed world continues to be hampered by ``persistent protection by tariff and other barriers such as Sanitary and Phytosanitary Standards (SPS). Tariff peaks and tariff escalation effectively block developing countries imports in t he developed world, it noted.

As such, India argued that the emphasis in these negotiations should be to devise ``disciplines for the accelerated elimination of distortions to trade created by developed country export subsidisation programmes and for the substantial reduction in dom estic support in developed countries''.

India fervently hoped that the Cairns group would put to use its enormous clout for fostering disciplines to deal with the trade-distorting subsidies being provided by developed countries rather than trying to ``develop uniform disciplines for all Member s thereby adversely affecting the interests of many developing countries whose development depends on the development of their agricultural sector''.