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Saturday, Jun 01, 2002

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Industry & Economy - WTO
Agri-Biz & Commodities - Foodgrains

`WTO no threat to food security'

Ch. Prashanth Reddy


SINCE the implementation of Agreement on Agriculture under WTO, a concern had been raised in India that it would destroy food security. It was feared that integration of Indian agriculture with world markets through elimination of quantitative restrictions and reduction in tariffs would lead to huge imports from other countries.

However, according to Prof. S. Mahendra Dev, Director of Centre for Economic and Social Studies (CESS), there is no threat from WTO on food security and on other agricultural commodities in terms of deluge of imports. India does not have to change her food policies such as minimum support price, buffer stock and public distribution system.

Prof. Dev says that the actual tariffs for most of the commodities in India are much lower than the Uruguay round bound rates. If India wants, it can check edible oil imports easily. Nevertheless, timely measures should be taken within the existing tariff bindings to restrict imports, which affect the livelihoods of our producers.

Regarding domestic support, Prof. Dev points out that India's product specific support is negative at minus 38.5 per cent, while the non-product specific support (input subsidies) is positive at 7.5 per cent. Thus, India is under no obligation to reduce domestic support or subsidies currently extended to agriculture as the support being given is below the permissible level of 10 per cent of the value of its agricultural output.

According to Prof. Dev, food security is mainly a question of economic access to households as food availability at the national level is not a problem and food absorption depends mainly on health, sanitation etc. Increase in employment opportunities and their quality will enhance economic access of the poor households to food and other items.

He says that high agricultural growth, diversification in agriculture and promotion of rural non-farm activities will increase quantity and quality of employment. Hence, apart from increasing public investment, the Government should act as a facilitator to improve private investment in agriculture and non-agricultural activities.

The viability of agriculture, on the other hand, depends on cost reduction and not on higher prices of the produce. So, focus should be on raising productivity, adoption of cost-reducing technologies and removal of restrictions on trade, marketing and processing within the country. These policies will also be useful for competing with other countries in international trade.

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