• Investment World
• eWorld
• Catalyst
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest

THE US AMBASSADOR to India, Mr Robert D. Blackwill, wants all tariff and non-tariff barriers on agricultural trade dismantled in India, and American products allowed freer access to this huge market. He says India's agri-exports to the US worth $1 billion annually are unmatched by imports of American products valued at just a third, limited largely to cotton and almonds. Mr Blackwill wants the trade imbalance corrected by allowing American products greater access to the Indian market through a system of variable import tariffs and/or link-deals, such as the export of Indian raisins to match import of American raisins. Mr Blackwill is right on numbers. But the issue goes beyond numbers, and the value of foreign trade in agricultural commodities. The question is if both countries are negotiating on equal terms. For most US corporates, agriculture really translates to agribusiness; but for an average Indian farmer it is his livelihood. In a purely commercial sense, Indian agriculture is no match to its American counterpart, in terms of land holding, input management, financial condition, productivity or marketing. Whileless than 3 per cent of the US population is engaged in agriculture, 60 per cent of Indians depend on farm and related activities for their livelihood. Obviously, India's calibrated trade liberalisation programme is the outcome of the policymakers' recognition that no foreign trade policy measure shall jeopardise the livelihood of several hundred millions here. Ever since India began liberalising, foreign trade restrictions have been progressively dismantled. India's import and export trade is today freer than ever before. But the irony is that developed countries do not seem to practice what they preach. High tariffs and quotas restrict access to their own markets for produce from developing countries. Often, sanitary and phyto-sanitary measures are invoked to discourage imports, or to use them as a bargaining chip. Traditional Indian exports such as edible nuts, spices and others have suffered. Importantly, trade-distorting subsidies on production and export continue. In the global marketplace, subsidised exports from developed countries crowd out agri-produce from developing countries — an issue side-stepped at the Doha WTO meeting.Credit and credit guarantee schemes need to be challenged for their trade-distorting effect. Import of genetically-modified products is another area of concern for India. In sum, the approach of India to agricultural imports is one of enlightened self-interest.

Thatsaid, nothing prevents India from rapidly strengthening its agriculture base to enable it face the challenges of globalisation. Attaining global competitiveness — production of globally acceptable quality at comparable cost — must become the mantra of the policymakers. A beginning has perhaps been made in the latest Budget. But the country has a long way to go before it will be able to stand up to international competition.

Send this article to Friends by E-Mail

Stories in this Section
Farm trade imperatives

Copyright © 2002, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line