Dayal doha round

8/7/2019 Dayal doha round

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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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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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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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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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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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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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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


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


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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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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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

Documents

Dayal doha round