Model Answer
0 min readIntroduction
India’s agriculture sector, contributing approximately 18.8% to the country’s GDP (2022-23, Provisional Estimates), supports over 58% of the rural population. Since its inception in 1995, the World Trade Organisation (WTO) has significantly impacted Indian agriculture through its agreements on agriculture, sanitary and phytosanitary (SPS) measures, and trade-related aspects of intellectual property rights (TRIPS). While the WTO aims to create a level playing field, the inherent asymmetries in global agricultural policies and the developed countries’ continued subsidies pose substantial challenges to Indian farmers and agricultural exports. This necessitates a careful examination of the prospects and challenges arising from WTO provisions for Indian agriculture.
Prospects for Indian Agriculture under WTO
The WTO framework, despite its challenges, presents certain opportunities for Indian agriculture:
- Market Access: The WTO’s principle of non-discrimination (Most Favoured Nation - MFN) and reduction in tariff barriers, theoretically, provide Indian agricultural products with greater access to global markets.
- Export Potential: India has a comparative advantage in certain agricultural commodities like rice, spices, fruits, and vegetables. WTO provisions can facilitate increased exports of these products.
- Disciplining of Subsidies: The Agreement on Agriculture (AoA) aims to reduce trade-distorting subsidies provided by developed countries. While progress has been slow, any reduction in these subsidies can create a more equitable playing field for Indian farmers.
- Geographical Indications (GI): The WTO’s TRIPS agreement recognizes and protects Geographical Indications, allowing India to protect and promote its unique agricultural products like Basmati rice and Darjeeling tea.
Challenges Faced by Indian Agriculture under WTO
Despite the potential benefits, Indian agriculture faces significant challenges due to WTO provisions:
- High Subsidies by Developed Countries: Developed countries, particularly the US and EU, continue to provide substantial subsidies to their agricultural sectors, distorting global markets and making it difficult for Indian farmers to compete. According to WTO data (2023), the US provided approximately $6.7 billion in domestic support, while the EU provided around $58 billion.
- Tariff Barriers: Despite tariff reductions, many developed countries maintain high tariff barriers on agricultural products, particularly processed foods, limiting market access for Indian exports.
- Sanitary and Phytosanitary (SPS) Measures: Stringent SPS measures imposed by developed countries, often based on perceived health and safety risks, can act as non-tariff barriers to trade. These measures frequently require costly compliance procedures for Indian exporters.
- Agreement on Agriculture (AoA) Limitations: The AoA’s ‘peace clause’ allows developed countries to continue providing subsidies without facing immediate legal challenges, undermining the objective of subsidy reduction.
- Intellectual Property Rights (TRIPS): The TRIPS agreement’s provisions on plant variety protection can restrict farmers’ rights to save and exchange seeds, potentially increasing their dependence on multinational seed companies.
Impact on Specific Sectors
The impact of WTO provisions varies across different agricultural sectors:
| Sector | Impact |
|---|---|
| Rice | Increased competition from subsidized rice exports from countries like Thailand and Vietnam. |
| Cotton | Challenges due to US subsidies, impacting Indian cotton farmers’ competitiveness. |
| Dairy | SPS measures and tariff barriers restrict access to lucrative markets like the EU. |
| Fruits & Vegetables | Opportunities for exports, but hampered by stringent SPS requirements. |
Recent Developments: The Public Stockholding for Food Security (PSFS) issue remains a critical concern for India. India seeks a permanent solution at the WTO to ensure that its food subsidy programs, essential for food security, are not challenged as trade-distorting. Negotiations are ongoing, but a resolution remains elusive.
Conclusion
The WTO presents a complex landscape for Indian agriculture, offering both opportunities and challenges. While increased market access and the potential for export growth are promising, the persistent issue of developed country subsidies, stringent SPS measures, and limitations within the AoA continue to hinder India’s agricultural competitiveness. A proactive approach involving strategic trade negotiations, investment in agricultural infrastructure, strengthening SPS compliance, and advocating for a fair and equitable global trading system is crucial for India to leverage the benefits of WTO membership and safeguard the interests of its farmers. A permanent solution to the PSFS issue is paramount for ensuring food security and supporting Indian agriculture.
Answer Length
This is a comprehensive model answer for learning purposes and may exceed the word limit. In the exam, always adhere to the prescribed word count.