Seminar on WTO Agreement on Agricultulre
November 19, 2001, New Delhi

Welcome Address by Dr Amit Mitra, Secretary General, FICCI

Shri B L Das
Shri J N L Srivastava
Distinguished Panelists
Senior Government Officials and Friends,

It gives me great pleasure to welcome you all to this Seminar on ''WTO Agreement on Agriculture", jointly organised by FICCI and the Department of Agriculture & Cooperation, Ministry of Agriculture.

We are indeed privileged to have with us this afternoon, Shri J N L Srivastava, Secretary, Ministry of Agriculture and Shri B L Das, Former Indian Ambassador to GATT and an internationally reputed and respected expert for his profound knowledge and vast experience in the subject. We are most grateful to you Sirs, for kindly accepting our invitation. We are thankful to Shri R C A Jain, Additional Secretary and Shri K D Sinha, Joint Secretary in the Department of Agriculture & Cooperation and our distinguished panel of Speakers for kindly agreeing to be with us this afternoon.

Friends, you will agree, this Seminar is being organised at the most opportune moment, as you all know that the Doha Ministerial Conference of WTO was concluded only five days back.

Agriculture is a way of life and will continue to remain the mainstay of all strategies for socio-economic development of the country. Rapid growth of agriculture is essential for ensuring food security and alleviation of poverty. At the same time, the WTO Agreement on Agriculture covers and affects," increasingly so, most aspects of rural/agricultural economy, food policies and farm trade.

With such pervasive and growing importance of the WTO in our agriculture sector, it is imperative that the essence of the WTO Agreement on Agriculture reaches an ever-widening audience. It has always been FlCCIs endeavour to involve more and more people as well as different economic interest groups in a nation-wide debate, deliberations and consultations on what should be our approach, strategy and negotiating position on tins Agreement.

As We look forward to learn from the distinguished speakers and specialists, let me quickly share with you some thoughts and concerns of the trade and industry.

The Agreement on Agriculture which came into force in 1995, marked the first step towards improving access to sheltered agricultural markets in high-income countries. The agreement was concluded with the understanding that the market distortions afflicting the agricultural sector would progressively be removed through (a) reining in the subsidies for exports (b) reduction in domestic support and (c) adoption of relatively more open trading regimes with replacing most non-tariff measures by appropriate levels of tariffs. However, on all these fronts, tardy implementation by the developed countries now poses several challenges to the developing countries like India.

Implementation experience indicates that developed countries have taken excessively high tariff-equivalents for their non-tariff measures. Tariff reduction commitments involved a simple average across products, thereby providing much leeway to spread reductions unevenly with relatively lower cuts in sensitive commodities. Tariffs on agricultural products generally remain substantially higher than on other products. While average applied tariffs of the Quad countries on non-agricultural, non-petroleum products range below 5%, those on agriculture items vary between 11 and 23%.

Tariff escalation is also of serious concern to developing countries as tariffs on agricultural products in high-income countries increase steeply with stages of further processing. This has the adverse impact of reducing demand for processed imports from developing countries, thus obstructing their diversification into higher value-added exports.

Further, domestic support and export subsidies in major developed countries' farm sector continue to remain extraordinarily high. Total support to agriculture in OECD-countries stood at $ 327 billion during 2000. Indeed, over the past 15 years support to agriculture in high-income countries as a share of gross farm receipts has come down only marginally. Several commodities of our export interest remain heavily subsidised. For instance, in the case of rice and sugar, support covers as much as 80 and 45 per cent of gross farm receipts.

The effectiveness of the agreement in disciplining export subsidies is also far from satisfactory. The share of subsidised exports has even increased for many products. For example, subsidised exports of wheat represent 25% of total wheat exports in 1998 - up from 7% in 1995. For sugar, the figure has moved up to 31 % from 19% in the same period.

In this context, we welcome the Doha Ministerial Declaration which has reflected India's concerns for substantial reductions in domestic support, and lowering and eventual phase-out of export subsidies in agriculture. We sincerely hope that these commitments would be carried out and fulfilled so that the prevailing distortions and protectionism in world farm trade are significantly reduced.

We are also happy that special and differential treatment for developing countries shall constitute an integral part of all elements of the negotiations on agriculture. This would go a long way to address our developmental priorities including food security and rural development.

In the negotiations on market access, India should seek a significant reduction in tariffs prevalent in developed countries. Such reduction should be enforced along each tariff line and not on average tariff levels for product groups.

I have attempted to flag a few critical areas with the hope that this would elicit responses and reactions from the experts and practitioners present here. Seeing such a distinguished gathering, I am confident, significant recommendations and strategies would emanate from today's deliberations, which would go a long way in helping the Government to strategise India's negotiating position.

With these words, I once again welcome all of you.
Thank you.