WTO – AGRICULTURE

A PROJECT COMPILED & SUBMITTED BY

ANISHA DAMANIA ROLL NO 60MONICA MALIK ROLL NO 26

SANGEETA NACHANKAR ROLL NO 29

SMITA NAIR ROLL NO 31SAGAR KARMEKAR ROLL NO 21

VIDYA JOHN ROLL NO 16

UNDER THE GUIDANCE OFPROF SUJATA JHAMB

WTO - AGRICULTURE

Members (148)

Applied Countries (28)

WTO Members

WTO-AoA WTO-AoA NEGOTIATIONSNEGOTIATIONS

CREATING WEALTH FROM FARM GATE TO FOOD PLATE

GENESISGENESIS• WTO Came into existence on WTO Came into existence on 1-1-19951-1-1995 with the with the

conclusion of Uruguay Round Multilateral Trade conclusion of Uruguay Round Multilateral Trade Negotiations at Marrakesh on 15th April 1994, to : Negotiations at Marrakesh on 15th April 1994, to :

– Provide common institutional framework for Provide common institutional framework for conduct of trade relations among membersconduct of trade relations among members

– Facilitate the implementation, administration and Facilitate the implementation, administration and operation of Multilateral Trade Agreementsoperation of Multilateral Trade Agreements

– Lay down Rules and Procedures Governing Lay down Rules and Procedures Governing Dispute SettlementDispute Settlement

– Provide Trade Policy Review MechanismProvide Trade Policy Review Mechanism

Agreement on Agreement on Agriculture (AoA)Agriculture (AoA)

• To establish a fair and market To establish a fair and market oriented agricultural trading system oriented agricultural trading system through substantial progressive through substantial progressive reduction in agricultural support reduction in agricultural support and protection resulting in and protection resulting in correcting and preventing correcting and preventing restrictions and distortions in world restrictions and distortions in world agricultural marketsagricultural markets

AREAS OF AREAS OF COMMITMENTSCOMMITMENTS

• Domestic SupportDomestic Support

• Market AccessMarket Access

• Export subsidiesExport subsidies

Export SubsidiesExport Subsidies

• Cut in value of subsidiesCut in value of subsidies– Developed countries - 36 % (1995 - 2000)Developed countries - 36 % (1995 - 2000)– Developing countries - 24 % (1995 - 2004) Developing countries - 24 % (1995 - 2004)

• Cut in subsidized quantitiesCut in subsidized quantities

Developed countries - 21 % (1995 - 2000) Developed countries - 21 % (1995 - 2000) Developing countries - 14 % (1995 - 2004)Developing countries - 14 % (1995 - 2004)

(Base Period : (1986 - (Base Period : (1986 - 1990) 1990)

To develop internationally agreed To develop internationally agreed disciplines to govern export credits, disciplines to govern export credits, guarantees or insurance programmesguarantees or insurance programmes

Domestic SupportDomestic SupportIn WTO terminology, subsidies in general are identified by In WTO terminology, subsidies in general are identified by “boxes” which are given the colours of traffic lights: green “boxes” which are given the colours of traffic lights: green (permitted), Blue (slow down — i.e. be reduced),(permitted), Blue (slow down — i.e. be reduced),Amber -( Forbidden)Amber -( Forbidden)

• Green Box - Research, Green Box - Research, Extension, PDS, Decoupled Extension, PDS, Decoupled Payments etc;Payments etc;

• Blue Box - Production Blue Box - Production

Limiting SubsidiesLimiting Subsidies ; ;

• Amber Box - AMS-subject to Amber Box - AMS-subject to reduction commitments , Viz.reduction commitments , Viz.– Product specific (MSP)Product specific (MSP)– Non product specific (input Non product specific (input

subsidies-fertilizer, Power, subsidies-fertilizer, Power,

irrigation) irrigation)

Anomaly in WTO Provision

•Developed countries still continue to heavily subsidize their agriculture.

•As per the World Trade Organisation provision these countries were required to reduce their subsidy considerably, so that the developing countries could get a chance to export their products to these countries.

RESULTS OF THESE ANOMALIES

There were three problems with the AoA –

1. it ignored the realities of global agricultural markets,

2. it reinforced industrial agriculture at the expense of sustainable agriculture, and

3. It failed to acknowledge the widely differing needs of countries at different levels of development.

Agricultural Subsidies

Source: OECD

•Agricultural subsidies have affected developing country farmers both by Agricultural subsidies have affected developing country farmers both by denying access to rich markets and allowing farmers from advanced countries denying access to rich markets and allowing farmers from advanced countries to sell to developing countries at suppressed prices.to sell to developing countries at suppressed prices.•This is particularly relevant to India because agricultural products accountThis is particularly relevant to India because agricultural products account for nearly 20% of Indian exports.for nearly 20% of Indian exports.

Agricultural Support in the US ($US million)Agricultural Support in the US ($US million)

1998 1999 2000 2001 2002Total value of production (at farm gate) 190,082 185,258 189,318 197,037 200,903Producer Support Estimate (PSE) 48,272 55,932 49,673 51,683 39,559Percentage of government support 25.4 30.2 26.2 26.2 19.7

INDIA SEEKS

•Protecting our food and livelihood security by having sufficient Protecting our food and livelihood security by having sufficient flexibility for domestic policy measures.flexibility for domestic policy measures.

•Protecting domestic producers from the surge in imports or Protecting domestic producers from the surge in imports or significant decline in import prices.significant decline in import prices.

•Substantial reduction in export subsidies and domestic support Substantial reduction in export subsidies and domestic support to agriculture in the developed countries for greater market to agriculture in the developed countries for greater market access to products of developing countries.access to products of developing countries.

• Finally, a more equitable & fair trading framework for Finally, a more equitable & fair trading framework for agricultural commodities agricultural commodities

MARKET ACCESS ISSUES CAN NOT BE SEEN IN ISOLATION MARKET ACCESS ISSUES CAN NOT BE SEEN IN ISOLATION TO SUBSIDY REGIMETO SUBSIDY REGIME

Domestic supportDomestic supportDomestic supportDomestic support

•The negotiations on domestic support should include the following The negotiations on domestic support should include the following elements:elements:

•Substantial reductions in all forms of domestic support should be Substantial reductions in all forms of domestic support should be undertaken by the developed countries.undertaken by the developed countries.

•Subsidies excluded from the discipline introduced by the AoA, i.e. Subsidies excluded from the discipline introduced by the AoA, i.e. those appearing in the “Blue Box” and the “Green Box”, need to be those appearing in the “Blue Box” and the “Green Box”, need to be re-assessed, particularly from the point of view of their influence on re-assessed, particularly from the point of view of their influence on production. production.

•  The Peace Clause “Article 13 (a) and 13 (b)” shall not be extended The Peace Clause “Article 13 (a) and 13 (b)” shall not be extended beyond implementation period. beyond implementation period.

Export SubsidiesExport SubsidiesExport SubsidiesExport SubsidiesThe negotiations on export subsidies should include the following The negotiations on export subsidies should include the following issues:issues:

Countries using export subsides should phase out this form of Countries using export subsides should phase out this form of farm support within two years of implementation of the farm support within two years of implementation of the revised disciplines to be followed by countries in the revised disciplines to be followed by countries in the agricultural sector.agricultural sector.

            Export subsidies discipline should include all forms of Export subsidies discipline should include all forms of spending that enhances the capacities of exporters to spending that enhances the capacities of exporters to increase trade, e.g. export credit, guarantees and increase trade, e.g. export credit, guarantees and insurance programmes.insurance programmes.

            The Peace Clause “Article 13 (c)” shall not be extendedThe Peace Clause “Article 13 (c)” shall not be extended beyond implementation period. beyond implementation period.

Present Stage of Present Stage of NegotiationsNegotiations

• The Cancun Ministerial failed to arrive at any The Cancun Ministerial failed to arrive at any agreement on modality for agriculture.agreement on modality for agriculture.

• There was no willingness on part of developed There was no willingness on part of developed countriescountries to recognize the genuine concerns of to recognize the genuine concerns of the developing countries, especially in the developing countries, especially in agricultureagriculture

• The US & EU attempted to drive their own The US & EU attempted to drive their own agenda, at the expense of Doha Declarationagenda, at the expense of Doha Declaration

• The concerns of the developing countries were The concerns of the developing countries were expressed by a group viz. G-20 at Cancun.expressed by a group viz. G-20 at Cancun.

Why much of the focus must be on agriculture…

•Even though it provides less than 4% of global GDP and 9% of int’l merchandise trade

•OECD manufacturing tariffs have fallen by 9/10thsover the past 60 years to <4%, while agricultural protection has risen, Agric. applied (bound) tariffs now average nearly 5 (10) times manufactures tariffs globally

•Also, the vast majority of the world’s poor rely on farming for a living, and may be hurt by agric protection policies of rich countries

Why focus on agriculture

• True, the harm to some DC farmers from rich-country agricultural protection is reduced via non-

reciprocal preference schemes such as the ACP’s Lome Agreement, EBA and AGOA

• But those schemes contravene the core WTO rule of non-discrimination

• In particular, they exclude numerous populous D.C’s (e.g. Brazil, China, India, Indonesia, Pakistan, Vietnam)

• Hence they may harm more poor farmers (through trade diversion) than they help.

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USA EU Japan Developingcountries

Disputes in WTO: total 1941)

As complainant As defendant

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Antal

SPS/TBT Agriculture Textiles TRIMS TRIPS GATS

Which agreements are subject to disputes?

OUR RECOMMENDATIONS•Developing countries cannot afford to be silent spectators.

•THE DEVELOPING COUNTRIES MUST COLLECTIVELY TAKE A STAND ON THE FOLLOWING:-

•"Zero-tolerance" on agricultural subsidies

•Restoration of Quantitative Restriction:

•Multilateral Agreement Against Hunger:

WHAT WE ALL NEED TO REMEMBER IS THE FACT THAT :

Pre-Independence India suffered repeated famines, drought and food shortages. But following the Green Revolution in the ’60s, yields and food stocks rose manifold. Now, 40 years later, Indian farmers have realised the follies of their tryst with intensive agriculture. Despite 70 per cent of the population being engaged in agriculture and allied activities, declining food grain production and access to food remain the two biggest problems confronting the country. Liberalisation has made things worse: commercial crops are eating into the fertile land tracts meant for essential food grains.

And ELEVEN years after the World Trade Organisation came into existence; the anticipated

gains for India from the trade liberalisation process in agriculture

are practically zero.