SAFEGUARDING AGRITRADE

In recent times, India has become more conscious towards protecting its agricultural trade interests at the international platforms. At the 10th Ministerial Conference of the WTO (Nairobi, December 2015), the Government of India adopted the following approach towards agritrade policy:

(i) A Special Safeguard Mechanism (SSM) for developing countries.

(ii) Public stockholding food for security purposes,

(iii) A commitment to abolish export subsidies for farm exports, and

(iv) Measures related to cotton.

Decisions were als o taken regarding preferential treatment to LDCs in the area of services and the criteria for determining whether exports from LDCs may benefit from trade preferences.

Policy stability: The changes in the agritrade policy hampers the concept of a market and needs to be discontinued with, due to the following reasons 33 :

(i) Frequent changes in the policy parameters (goal posts) of trade in agricultural products in the form of changes in import duties and minimum export prices, etc., create instability of policy for any investment in the agro-processing industry.

(ii) The changes in policy parameters have limited impact on the price the consumer pays, because of the time taken to arrive at the decision and the same translating into additional/reduced supplies.

(iii) It certainly does not impact the farmer who has received his

remuneration based on the price prevailing at the time the produce leaves the farm gate.

(iv) High prices of commodities in a particular year do not translate into benefits to the farmer in the same year, but create expectations, possibly not rational, of the same in the next year, enhancing cropped area in the next year/cropping season, leading to oversupply and reduction in prices and consequently of incomes.