The Hindu Business Line : Heed Lamy

Eight long years after the Doha Round began, the world is still unable to strike a consensus on farm subsidies and related issues such as market access. If a sense of frustration over the seemingly intransigent attitude of developed countries is setting in among essentially-agrarian developing countries, it may well be justified, for, far from reducing farm support, some industrial countries have actually gone ahead and raised it. Simply put, there is unequal, and indeed u nfair as some might assert, competition between farmers in rich and poor countries in the global marketplace even after considering differences in natural endowments. Also, non-tariff barriers and technical barriers to trade are being employed in a facile manner to hamper exports from poorer nations. It is in the context of the protracted impasse in trade negotiations of recent years that the statement of Mr Pascal Lamy, Director-General, World Trade Organisation (WTO), comes as a breath of fresh air.

Speaking at the Food and Agriculture Trade Policy Council in Salzburg, Austria, recently Mr Lamy hit the nail on the head when he said: “The world needs a shared vision on food and agriculture trade policy.” Indeed, he went a step further to assert that food and agricultural trade policy does not operate in a vacuum. “In other words, no matter how sophisticated our trade policies may be, if domestic policies do not themselves incentivise agriculture, and internalise negative social and environmental externalities, then we will always have a problem”. It is obvious that trade — free or restricted — by itself will have only a limited role to play in addressing the structural issues of a country’s agriculture. It is for governments to design and implement policies that are growth-oriented.

India is a stark example of how farm trade has been opened up and restrictions lifted without adequate attention being paid to the many structural issues that continue to stymie growth. Indian policymakers seem to believe that tinkering with trade, tariff and price policies is enough to encourage production and distribution. This is not to suggest such policies have no place in agricultural systems. Far from it; they will surely deliver better results if governments and policymakers first invest adequately in strengthening production and distribution structures as also build capacity among growers to withstand competition. It is a sad irony that a country enjoying unparalleled natural endowments — 270 days of sunshine and 900 millimetres of rainfall a year, varied agro-climatic conditions, 6,500 kilometres of coastline, biodiversity, and a vast labour force — suffers from low yields and low growth in agriculture.

Related Stories:
Sectoral concessions in WTO negotiations
Respite for the WTO
Lamy picks up threads of failed Doha talks
‘Our aim in WTO is to get better market access for agri sector’