Essay Example on The plight of the fanners in developing Countries

The plight of the fanners in developing countries is directly linked to the level and kind of subsidy given to the farming sector in the developed world Exporters of agricultural produce from developing countries face a protection of four to seven times higher than the manufacturing sector while exporting to developed countries b The agriculture subsidies provided by the OECD countries are more than six times what they spend on official development assistance for developing countries c OECD governments support sugar producers at the rate of US 6 4 billion annually an amount nearly equal to all developing countries exports d The distortions in the trade of agricultural commodities created through the high level of subsidies in the developed countries shut out the potentially more competitive agricultural products from developing countries like India This poses high risk to the very livelihood of more than 650 million people in India who are solely dependent on agriculture e 

The legitimate concerns of millions of farmers in India for whom agriculture means survival and not commercial operation cannot be sacrificed to sub serve the agri business profits of a few millions in the developed world which is sustained through US 1 billion subsidies each day in the OECD countries Origins and Nature The General Agreement on Tariffs and Trade was put in was in Geneva in 1948 by 23 countries including India in order to transform the world economy impaired in the Second World War which followed the Great Depression The GATT comprised a trade pact among the member countries with the objective of forming a permanent organisation which would enforce a set of rules for the conduct of world trade and also update these rules The agricultural sector has done a large extent in the fringes of the process of trade liberalisation that has been going on for the last 25 years The rules of the General Agreement on Tariffs and Trade cover agricultural trade but country have found it convenient both to ask for aspersion to protect their own domestic agricultural Interests and also to be less rigorous in the enforcement of such rules even when derogations have not been requested The principles of the GATT recognise that agricultural trade based on the international division of labour is to the advantage of each country whether importer or exporter But the existence of extensive domestic farm support policies has meant that such trade has often become divorced from considerations of efficient production moreover such trade as exists has been characterised by price instability and uncertainty of income for producing countries 

One of the alternative which was the establishment of domestic farm policies which are less disruptive of trade has the larger application Country would still preserve their right to run as extensive a farm programme as they see fit either individually or in conjunction with other country In India it has been possible to maintain without any hindrance the domestic policy instruments for promotion of agriculture or for subsidised targeted supply of food grains The domestic policy measures like the operation of the Minimum Support Price MSP the public distribution system PDS as well as provision of input subsidies to agriculture have not been constrained by the Agreement In fact certain provisions contained in Annex 2 of the Agreement popularly known as the Green Box give us the flexibility to provide support for research and extension services pest and disease control marketing and promotion services infrastructure development payments made for relief from natural disasters payments under regional assistance programme for disadvantaged regions and payments under environmental programmes As agriculture constitutes a vital segment of the Indian economy finding greater market access for India s agricultural products especially in the developed country markets would therefore be one of the important issues during the negotiations Food security of our people protection of the interests of domestic farmers and their livelihood as well as the need for export maximisation will be the guiding principles during the ongoing negotiations Lessons Learned It is an attempt to understand the implication of multilateral trade liberalization on Indian agriculture In particular the research is to examine how the participation of India in WTO a full and liberalized trade regime would affect the agricultural trade 

The necessity to do this study comes from the fact that agriculture constitutes one of the largest sectors of the Indian economy which contributes about 26 percent of the total GDP oflndia and provides employment to almost 59 per cent of India s total workforce It is often said trade liberalization in agriculture has inherent benefits for the developing countries since they enjoy a comparative advantage in agriculture Nevertheless in a competitive world characterized by rapid technologies advance the benefits of trade liberalization in agriculture to countries like India would essentially depend on the relative competitiveness of agriculture Benefits to India liberalizing its agricultural trade depends on the extent multilateral trade negotiations can bring about trade liberalizations eliminate excessive domestic and export subsidies by the developed countries and provide market access in particular to the developed countries markets Recommendations for the future The rules governing agricultural trade have undergone a major change as a result of the Uruguay Round The Agreement on Agriculture has extended to agriculture the tariffs only rule for border protection banned additional export subsidies categorized domestic policies into those that are acceptable and those deemed trade distorting and improved the rules on the use of sanitary and phytosanitary standards The process of converting NTM to tariffs and the binding of those and other tariffs is clearly the most significant of these new developments The existence of GATT bound tariffs has the great advantage of limiting the influence of domestic lobbies on the formulation and operation of trade policies