Q.25 Write a note on the prospects and challenges to Indian agriculture in the WTO regime.

Ans. As the provision of the WTO came into effect, experts rightly visualised great prospects and at the same time some serious challenges for the Indian agriculture sector. As far as the extent of the prospects are concerned, immense export potential is visible in the following areas:

(i) Cotton textile, yarn, readymade garments, etc.

(ii) Agricultural products, cereals, fishery products and forest goods.

(iii) Processed foods, beverages, and soft drinks. A joint projection of the OECD and the GATT did put an increase in the world merchandise trade by US $745 billion upto 2005 once the WTO provisions get implemented. As per the projection, 99 per cent of this trade almost falls in the agriculture sector. As India has been an agrarian economy and enough prospects for agricultural expansion are possible, it can encash this opportunity (NCAER survey supported this in 1993–94).

We may see the possible major challenges in the WTO regime:

(i) Food self-sufficiency: As cheaper food-grains will have unrestricted flow into India, we might become almost dependent upon import supplies for our food requirement—our self-reliance is badly threatened.

(ii) Price-stability: The price stability aspect of agricultural products, specially the sensitive foodgrains, will be in great risk as fluctuations in the imports are natural (agriculture being highly prone to weather and climatic variations) hurting the poor people.

(iii) Cropping pattern: Cropping pattern of India might go in for a major shift in favour of profitable crops threatening the fragile ecosystem and the balance of biodiversity.

All the above given challenges could be dealt with the suitable type of timely agricultural and trade policies—but WTO provision does not give such kind of sovereign choices to its member countries. It means we need to go for flexibility in the provisions of the WTO.

(iv) Weaker sections: Weaker sections of the society will again miss the train of globalisation for their upliftment as the process of globalisation is not neutral to area, crop and the individual. We will need a more

focussed distributive kind of economic policies to do it.

(v) Commitments towards the WTO: Our agricultural subsidy cannot cross the 10 per cent mark of the agricultural GDP, any year. Though this is still not alarming, the higher subsidies forwarded by the USA and the EU is diluting the competitiveness of Indian agricultural goods—the ‘Blue Box’ and the ‘Green Box’ subsidies need redefinition immediately.

Agricultural provisions of the WTO have always been a matter of great concern for the developing nations and the ministerial negotiations were stalled on several occasions due to them. In the last and the 10th Ministerial Conference of the WTO (Nairobi, Kenya, December 2015), certain consensus emerged regarding the sector—agricultural subsidies to be rationalised by the developed nations; permanent solution for public stockholding of food crops; and subsidies to continue on fisheries (Economic Survey 2015–16).