Agriculture and WTO in Indian

Context

2

Water and Agriculture Management

1. Agriculture in India and WTO

2. Water use in Agriculture Vis- a vis other uses.

3. Soil, Water and Plant relationship

4. Soils and their classification

5. Plant physiology

6. Water and plant nutrition

7. Climate and rain fed agriculture

8. Crop water requirement and crop planning

9. Virtual water requirement of different crops

10.Crop productivity

11.Salinity and productivity

12. Drainage and Productivity

3

Water and Agriculture Management

13.Water distribution and irrigation practices

14.Agricultural practices for important crops

15 Sustainable agriculture

16 Farm Economics

17 Water Pricing for agriculture

18 Pest management

19 Fertilizer application

20 Organic farming

21 Urban agriculture

22 Various schemes in water and agriculture 4

Agriculture in India

Current Scenario

and

Policy Framework

5

Agriculture In India

6

Indian Agriculture has made rapid

strides since independence

• From food shortages and import to self-

sufficiency and exports.

• From subsistence farming to intensive and

technology led cultivation.

• Today , India is the front ranking producer of

many crops in the world.

• Ushered in through the green, white, blue

revolutions

7

FIVE DECADES OF INDIA’S

AGRICULTURAL

GROWTH

ACHIEVEMENTS

• Doubling of irrigated area

• Introduction and rapid spread of high yielding varieties of major crops

• Increasing application of chemical fertilizers

• Increased number of ground water wells

• Increased food production

8

FIVE DECADES OF INDIA’S

AGRICULTURAL

GROWTH (Contd.)

CONCERN

• Plateauing of agricultural productivity in

irrigated areas and in some cases

declining

• Demand for food and fibre in the coming

decades

9

INDIAN PLANNERS VIEW

OPTIMISTIC

• A sustained and substantial expansion of irrigated areas and cropping intensity can be achieved

• A significant improvement in irrigation efficiency by more intensive recycling of seepage and regeneration of water from canals and reducing wasteful use

• Total water requirements will approach the limits of utilizable supplies in the cause of next two decades and the potential may well be exhausted by mid-century

10

INDIAN PLANNERS VIEW

PESSIMISTIC

• Supplies will be inadequate to meet

requirements that India will have to

import sizeable amounts of food and that

• Scarcity will lead to an intensification of

conflicts over water.

11

Indian Agriculture- Some Facts

• Total Geographical Area - 328 million hectares

• Net Area sown - 142 million hectares

• Gross Cropped Area – 190.8 million hectares

• Major Crop Production (1999-2000)

»Rice 89.5 million tonnes

»Wheat 75.6 million tonnes

»Coarse Cereals 30.5 million tonnes

»Pulses 13.4 million tonnes

»Oilseeds 20.9 million tonnes

»Sugarcane 29.9 million tonnes 12

Indian Agriculture- Some Facts

• Contributes to 24% of GDP

• Provides food to 1Billion people

• Sustains 65% of the population : helps alleviate

poverty

• Produces 51 major Crops

• Provides Raw Material to Industries

• Contributes to 1/6th of the export earnings

• One of the 12 Bio-diversity centers in the world with

over 46,000 species of plants and 86,000 species of

animals recorded

13

Major Achievements

14

15 16

17 18

19 20

21 22

23 24

Indian Agriculture Scenario

SWOT AnalysisSTRENGTHS

• Rich Bio-diversity

• Arable land

• Climate

• Strong and well dispersed research and extension system

OPPORTUNITIES

• Bridgeable yield crops

• Exports

• Agro-based Industry

• Horticulture

• Untapped potential in the N.E.

WEAKNESS

• Fragmentation of land

• Low Technology Inputs

• Unsustainable Water Management

• Poor Infrastructure

• Low value addition

THREATS

• Unsustainable Resource Use

• Unsustainable Regional Development

• Imports

25

Current Concerns

• Pressure of the Population on Land

• Skewed distribution of operational

holdings

• Land Degradation

• Water Balance

• Low level of mechanization

• Low Fertilizer Consumption

26

The First Ever National Agriculture Policy was

announced in July 2000. The Policy seeks to

overcome these constraints and achieve

• A Growth rate in excess of 4 percent per annum in the

agriculture sector.

• Growth that is based on efficient use of resources, and

conserves our soil, water , and bio diversity.

• Growth with equity, i.e. growth which is widespread

across regions, and different classes of farmers.

• Growth that is demand driven and stabilizes domestic

markets and maximizes benefits from exports in the

face of Global Challenges.

• Growth that is sustainable ,technologically ,

environmentally, and economically.

27

The Policy has indicated a nine-fold package of policy

initiatives to achieve the objectives

• Development of Sustainable agriculture

• Food and Nutritional security

• Generation and Transfer of Technology

• Improvement of input efficiency

• Provision of incentives for agriculture

• Promotion of Investments in agriculture

• Strengthening of institutional infrastructure

• Better risk management

• Introduction of Management Reforms28

TARGETS

• Food Grain Production will be doubled in ten years,

so as to make India hunger free .

• Special emphasis will be on horticulture production

in order to achieve a quantum increase.

• Allied sectors like live stock, dairy poultry,

fisheries, will be promoted

• Production of oilseeds and pulses will be raised

substantially.

29

Strategies & Initiatives : Enhancing Value

Addition

- 98% of fruits and vegetables are sold as fresh products.

- processing accounts for only 7% of agricultural value.

- wastage levels are extremely high.

• Improved post harvest interventions: price support

mechanism, grading, handling, storage, packaging,

marketing, processing.30

Strategies & Initiatives : Enhancing Value

Addition

– Draft National Policy on Food Processing prepared.

– Draft Processed Food Development Act formulated.

– Package of promotional schemes available for

infrastructure development and quality improvement.

– To raise the processing level by 10% , an investment of

approximately Rs 1400 billion required.

31

India’s International Trade - 2001-02

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 Billions32

Strategies & Initiatives :

Promotion of Exports

• India’s competitive advantage

- Diverse agro climatic conditions.

- Sufficiency of Inputs.

- Reasonable labour costs.

• Agriculture exports from India account for less than 1% world

trade in Agriculture commodities.

- Target is to raise India’s share to 2% .

• Thrust Areas

� Improvement and maintenance of quality.

� Consonance with International Standards.

� Strengthening of Infrastructure.

� Identification of niche products and markets

33

India’s Agricultural Export Potentials

� Marine Products

� Rice

� Wheat

� Condiments and Spuces

� Cashew

� Tea

� Coffee

� Castor

� Jute

� Fruits and Vegetables- Onions, Mango, Grapes, Banana, Tomato , Potato , Lichchi ,etc.

34

Negotiations on WTO

Agreement

On

Agriculture

35

WTO

• The Institution

• The World Trade Organization (WTO),

established on January 1, 1995, is a multilateral

institution charged with administering rules for

trade among member countries.

• Currently, there are 145 official member

countries.

36

Nature of Activities

The World Trade Organization (WTO), established on

1 January 1995, is the legal and institutional

foundation of the multilateral trading system. It

provides the principal contractual obligations

determining how governments frame and implement

domestic trade legislation and regulations. It is the

platform on which trade relations among countries

evolve through collective debate, negotiation and

adjudication.

The WTO is the embodiment of the results of the

Uruguay Round trade negotiations and the successor

to the General Agreement on Tariffs and Trade

(GATT).

WTO

37

•The main export commodities in India include oil products, petroleum

products, sugar, tea and coffee, textiles and knitwear, tobaccos, iron ore,

jewellery, jute, leather goods, machinery, organic and inorganic chemicals and

cotton. The main import commodities include fertilisers, fuel, gemstones,

industrial chemicals, iron steel, non-ferrous metals, edible oils and chemical

products.

WTO-India

•There are seven Export Processing Zones (EPZ), namely - Kandla, Santa Cruz

(Bombay), Mumbai, Falta (West Bengal), Madras (Tamilnadu), Noida (UP),

Cochin (Kerala) and Visakhapatnam (Andhra Pradesh).

•India's Central Bank has relaxed foreign exchange regulations governing imports

of capital goods and authorised dealers may release foreign exchange for such

imports without limits. Foreign currency and travellers' cheques may be taken into

India without limit but must be declared to the customs authorities on arrival as

long as the amount taken out of the country may not exceed that taken in. Import

duties are applied to almost all items imported into India and are a major source of

revenue for the central government and the tariff is based on the Harmonised

System.

38

WTO

• The WTO functions as the principal international body concerned with multilateral negotiations on the reduction of trade barriers and other measures that distort competition.

• The WTO also serves as a platform for countries to raise their concerns regarding the trade policies of their trading partners.

• The basic aim of the WTO is to liberalize world trade and place it on a secure basis, thereby contributing to economic growth and development.

39

WTO

• Government support and protection for agriculture had been

increasing globally,

– all countries felt the consequences in terms of rising budget

expenditures, depressed markets, trade frictions, and the overall

drain on economic growth.

• International agricultural markets were distorted by the use

of high price supports and restrictive import barriers,

– which protected domestic producers while denying competitive

producers the opportunity to sell their products in these markets.

• High price supports in some countries led to surplus

production that was dumped on world markets with the aid

of export subsidies. 40

The Agreement on Agriculture

• During the Uruguay Round negotiations,

countries agreed to the long-term objective

to establish a more fair and market-oriented

agricultural trading system.

• Countries also agreed to specific

disciplines for agriculture in the areas of

market access, export subsidies, and

internal support. These areas are commonly

referred to as the three pillars.

41

Market Access

• The market access provisions of the Agreement

on Agriculture required that non-tariff measures

be replaced by tariffs.

– For example, quotas, variable levies, discretionary

licensing, import bans, and other non-tariff barriers

were no longer allowed.

• Thus, virtually all market access barriers are on

a common standard -- tariffs -- that any exporter

can readily measure, understand, and predict.

– All tariffs are bound. Once bound, a tariff cannot be

increased without compensating other countries. 42

Export Subsidies

• : Under the WTO, export subsidies for agriculture were,

for the first time, subject to effective rules.

– Member countries established maximum ceilings on the

quantity and budgetary outlays for export subsidies on a

product-specific basis, subject to reductions over time.

– Export subsidies include direct government or producer

subsidies on exports, transportation, and freight; marketing;

and the sale or disposal of government stocks below domestic

prices.

• Export subsidies generally are the most trade distorting

of government policies because they allow subsidizing

countries to displace competitive producers in world

markets

43

Internal Support

• : Governments provide internal support to their producers in many ways. Some of these policies have significant consequences beyond a country's borders.

– Such policies can impose costs on other countries and world markets by encouraging overproduction or inducing production of specificcommodities.

– Under the WTO, policies that seriously distorted trade were differentiated from those with minimal trade effects. The two respective categories were labeled "amber" and "green".

• Countries should not exceed the level of support to which they have agreed as measured by their Aggregate Measurement of Support (AMS). The AMS essentially totals, commodity by commodity, a country's support measures linked to production or prices.

– They include price supports, marketing loans, payments based on acreage or number of livestock, and certain subsidized loan programs.

44

Doha Development Agenda

• At the 4th Ministerial in Doha ,WTO Members

launched new multilateral trade negotiations.

– Doha Declaration calls for substantial improvements in

market access, the reduction of, with a view to phasing out,

all forms of export subsidies, and substantial reductions in

trade-distorting domestic support.

• WTO Members also agreed that new reduction

commitments (modalities) in the areas of market

access, domestic support, and export competition are

to be established by March 31, 2003.

45

Doha Ministerial Declaration

• The long term objective of establishing a fair and

market oriented trading system reaffirmed

• Need for fundamental reform through

strengthened rules and specific commitments on

support and protection reiterated

• Comprehensive negotiations sought for affecting:

�substantial improvements in market access

�Reductions leading to eventual phasing out of all

forms of export subsidies

46

Doha Ministerial Declaration

• Substantial reduction in trade distorting domestic

support

• Special & Differential treatment to be an integral

part of the negotiations

• Modalities for further commitments to be finalised

by 31March 2003

• Comprehensive draft schedules to be submitted by

the 5th Session of the Ministerial Conference

47

Status of Negotiations in Agriculture

• The first phase of the negotiations began in march

2000 ended in March 2001

• India also filed its proposals in the areas of market

access, food security, domestic support and export

subsides & co-sponsored proposals on market access and

export subsidies

48

Status of Negotiations

• The second phase began in May 2001 and has

concluded with the Special Session meeting of

February 2002

• Country positions fairly well defined during

this phase of negotiations

49

Developed Country Positions

• EU against fast track approach to liberalization

• Nordic Countries and Japan for continuation of subsidy regimes in agriculture

• Australia , New Zealand and Canada (of Cairns Group) favor a totally market oriented approach and oppose trade distorting subsidies and protectionist regimes of EU and Japan

• US , opposing EU, but not completely with Cairns Group either, aggressively seeks market access in other WTO member countries

50

Developing Country Positions

• India, Pakistan, Sri Lanka, ASEAN etc highlight significance of role of agriculture in their economies and seek to preserve domestic policy flexibility to guard food security concerns

• Developing Cairns Group Countries (Argentina, Brazil ,South Africa) favour a market oriented & non trade distortive approach

• Net Food Importing Countries (Single Crop economies) like Egypt, Mauritius, etc favourgradual and phased reduction in export subsidies