10 AGREEMENT ON AGRICULTURE (AOA) AOA and the Agreement on Application on Sanitary & Phytosanitary Measures were negotiated in parallelDecisions on measures concerning the possible negative effects of the reform programme on least developed and net food importing developing countries also part of the package.
11 THREE MAIN ELEMENTS OF THE AGREEMENT Market AccessDomestic SubsidiesExport SubsidiesIn addition, special concerns of developing countries and net food importing countries are also addressed.
12 MARKET ACCESS Tariffication of Non Tariff Barriers (NTB’s) Reduction of TariffsBy a simple average of 36% over 6 years for developed countriesBy a simple average of 24% over 10 years for developing countriesMinimum AccessNot less than 3%, rising to 5% by 2004 for developing countries
13 DOMESTIC SUPPORT Aggregate Measurement of Support (AMS) Product SpecificNon-Product SpecificDe Minimis ProvisionsThree Categories of Domestic Support“Green Box” Measures“Blue Box” Measures“Amber Box” Measures
14 DOMESTIC SUPPORTGreen Box measures include all publically funded government programmes which do not provide price support to producers. For example, research, pest and disease control, marketing and promotion services, infrastructure, public stock holding, payments under environment programmes etc. These measures are considered least trade distorting and hence are exempt from reduction.
15 DOMESTIC SUPPORTBlue Box measures refer to direct payments under production limiting programmes, which are also not subject to reduction commitments.Amber Box measures include product specific support as well as non-product specific support extended to the farm sector. These are subject to reduction above the de minimis level.
16 DOMESTIC SUPPORT Other exemptions include: Investment subsidies in the Agriculture sectorInput support to low income/resource poor farmersSupport for diversification from illicit narcotic crops
17 EXPORT SUBSIDY Prohibited Otherwise subject to reduction commitments Value of SubsidyBy 36% over 6 years for developed countriesBy 24% over 10 years for developing countriesNo reduction for least developed countriesQuantity of ExportBy 21% over 6 years for developed countriesby 14% over 10 years for developing countriesNo reduction for least developed countries
18 NOTIFICATION OBLIGATIONS Members bound to notify changes in Market Access, Export Subsidies and Domestic SupportIndia notifiesAMSProduct Specific for 19 cropsNon product specific: Fertilizer, Irrigation Electricity and seedsGreen BoxSpecial & differential , provisions for low income/ resource poor farmers
19 INDIA’S COMMITMENTS Market Access No tariffication; ceiling bindings of100% for primary commodities150% for processed agricultural products300% for edible oilsCont----/----
20 INDIA’S COMMITMENT Domestic Support Export subsidy Price Support for 19 productsAMS is negative by a large margin and below De MinimisExport subsidyIndia does not have these.No commitments
22 GROWTH OF AGRICULTURAL EXPORTS IN POST-WTO PERIOD Value of Agri ExportsPercentage ChangeIn Rs. Crores110.83In Rs. Crores at prices121.88185.6752.33In Million Dollars42.23
23 TRENDS IN AGRICULTURAL TRADE OVER THE LAST TWO DECADES VALUE IN US $ MILLIONSl.No.Item1.Total exports848618143(113.80)44400(144.72)2.Total Agricultural Exports26013521(35.37)6013(70.77)3.%share of Agri Exports to Total Exports30.6519.40(-36.70)13.54(-30.20)4.Total imports1586924075(51.7)49720(106.525.Total Agricultural Imports20301354(-33.26)1676(23.78)6.%share of Agri Imports to Total Imports12.805.62(-56.1)3.37(-40.03)7.Value of Agri Imports as78.0438.45(-50.73)27.88(-27.50)* Figures in parentheses indicate percentage over the previous decade
24 CHANGES IN UNIT EXPORT PRICES (DOLLAR PER KG) Sl.No.Commodity1.Fresh Fruits0.130.602.Processed Fruits and Vegetables0.540.643.Poultry and Dairy Products0.421.734.Tea2.052.135.Spices1.261.456.Other Cereals0.100.197.Non-Basmati Rice0.240.258.Meat and Meat Preparations1.011.079.Groundnut0.630.5010.Coffee2.611.3611.Basmati Rice0.620.5512.Wheat0.150.1213.Marine Products3.512.7514.Fresh Vegetables0.890.2015.Fruits and Vegetable seeds1.161.09Source: CMIE Reports
25 WTO DOMESTIC SUPPORT NOTIFICATIONS ($ BILLION) Country and CategoryBase1995199619971998European Union1161171199996- Amber10262615652- Blue-2822-Green14273021Japan746860345338366- Green2426United States5864-Amber510-Blue29515554Source: WTO Notifications
26 ESTIMATES OF SUPPORT TO AGRICULTURE IN OECD (FIGURES IN US DOLLARS BILLION) Item199719981999Producer Support Estimate (PSE)246267271283Total Support Estimate (TSE)308347329352361Source : OECD data base
27 PERCENTAGE AGGREGATE MEASURE OF SUPPORT BY MAJOR COUNTRIES Country as % of value agriculturalYear of ProductionDomestic SupportEU199748.03Japan199839.15USA28.59Canada10.60
28 INDIA’S AGGREGATE MEASUREMENT OF SUPPORT (RS. CRORES) ItemProduct SpecificNon Product Specific**780.35882.44% of Value of Agricultural Production**5.407.521.832.07Note: * - does not exclude support to resource poor farmers** - indicated only for non-product specific supportSource: Ministry of Commerce, Government of India
29 MAJOR COUNTRY POSITIONS EU, Japan and certain Nordic countries advocating multifunctionality in an attempt to continue with the high degree of protection currently available to their agriculture.Cairns Group of agriculture exporting countries (18) calling for substantial reduction in tariffs, domestic support and elimination of export subsidies.
30 MAJOR COUNTRY POSITIONS United States looking for greater market access for its products, championing trade in genetically modified products, calling for reduction in tariffs and trade distorting support.Developing countries having a difference of opinion keeping in view their status as net importers of food or exporters of agricultural products
31 S&D PROVISIONSOstensibly designed to create a level playing filed between developed and developing countriesAOA provides S&D treatment favouring the developed countries, i.e. the continuance of Blue Box, export subsidies, unlimited Green Box and domestic support levels and TRQs
32 INDIA’S OBJECTIVESTo preserve flexibility in domestic support policies to ensure food and livelihood security.To create opportunities for a meaningful expansion of agricultural exports.
33 PROPOSALSAs a S&D measure, developing countries to be allowed to maintain appropriate levels of tariffsDeveloping countries to retain flexibility for public stock holding and public distribution of food grainsUse of special safeguard in the event of a surge in imports or a decline in pricesMeasures for poverty alleviation, rural development and employment to be exempt from AMS.Cont…….
34 PROPOSALSPrimary agricultural commodities like jute, rubber, coir and primary forest produce which provide employment and livelihood to many to be covered by AOA.Exemption to developing countries from any obligations to provide minimum market access.Historical low tariff bindings to be rationalised commensurate with bindings on similar category of products under the Uruguay Round.Negative product specific support to be allowed to be adjusted against positive non-product specific support.Cont…….
35 PROPOSALS To achieve meaningful market access it is proposed to seek: Substantial reduction in tariffs, tariff peaks and tariff escalation by developed countriesEventual abolition of TRQsTransparent administration of TRQs with preference to developing countries in the interregnumCont…….
36 PROPOSALSSuitable accounting of all trade distorting support (e.g. paras 5,6,&7 of Annex 2 and Art. 6.5 of AOA) in the AMS calculationsElimination of all forms of export subsidies including export credits, guarantees, insurance etc. by developed countries.Flexibility available to developing countries under ASCM to be preserved in AOACont…….
37 PROPOSALS Peace clause not to be extended for developed countries Down payment by way of 50% reduction in trade distortion and tariffs by developed countries by the end of 2001Retaining and strengthening the existing S&D provisions
39 AT DOHA Implementation related concerns Agreed to negotiate on outstanding implementation issues which shall be an integral part of the work programme
40 AT DOHAAgricultureAgreed to a comprehensive negotiation for substantial improvement in market access, phasing out of export subsidies and reducing domestic support.
41 AT DOHA Market access for non agricultural products Agreed to negotiate for reduction of tariffs, including peak tariffs and removal of non-tariff barriers
42 AT DOHATRIPSAgreed to consider extension of the protection of geographical indications provided for in Article 23.Waiver from TRIPs for cheap medicines overriding patents in times of public health emergencies
43 AT DOHATrade & Investment/Trade & competition/Government procurement/Trade facilitationNegotiation to take place but through explicit consensus
44 AT DOHA Trade & Environment Agreed to negotiate on the relationship between existing WTO rules and specific trade obligations set out in multilateral environment agreements.
45 FUTURE STRATEGY FOR DEVELOPING COUNTRIES WITH REGARD TO AGRICULTURE
46 FUTURE STRATEGYEnsure reduction of AMS and duties in letter and spirit ………. The implementation issues
47 FUTURE STRATEGYForge a common platform to change the rules of the game: special and differential treatment, AMS, reduction of duties.
48 FUTURE STRATEGY Are we prepared? Proactive preparations for penetrating the markets when the duties and the subsidies come down.Are we prepared?
49 FUTURE STRATEGY Active participation in Codex meetings. Forging common platform for SPS related barriers.
50 FUTURE STRATEGYEmphasis on quality within the country……… the “Quality” culture has to be developed
51 FUTURE STRATEGY Identify subsidies which are WTO compatible………………… Agri Export Zones are a movein this direction.
52 FUTURE STRATEGYTake a fresh look at agricultural commodities which are being supported and move towards such commodities which are market driven rather than State drivenWheat Durum WheatRice Basmati RiceSugar PotatoesOnionEggs