POST WTO AGRICULTURE TRADE, FOOD SECURITYAND AGENDA FOR AGRICULTURE NEGOTIATIONS Ramesh Chand National Centre for Agricultural Economics and Policy Research New Delhi

IMPORTANCE OF AGRICULTURE IN SAC CountryAg share in GDP % Ag share in employment % Bangladesh2162 India2258 Nepal3976 Pakistan2342 Sri Lanka1935

WHAT AGENDA FOR TRADE NEGOTIATIONS ON AOA?  Experience during post WTO decade  Difference between expectations and reality  Food security: Self sufficiency and Self Reliance  Changes in dependence on food imports  Trade orientation of agriculture  Agricultural growth in South Asian Countries before and after WTO

EXPERIENCE AND IMPACT  Period: 1991 to 2002  Three sub periods: Liberalisation phases and price phases PeriodYears Int. price index Pre WTO1991 to Initial WTO years 1995 to Post WTO 1999 to

FOOD DEPENDENCE ON IMPORT: IMPLICATIONS  Liberalisation implies increase, that is obvious  What matters is change in self reliance:  Whether SR improved  Deteriorated  Remained unchanged  This can be seen from changes in Net Trade If dX>dM Improvement in self reliance If dX<dM Decline in self reliance  Seen through changes in Net agriculture trade  Again two situations: (high global prices) (Low global prices)

IMPORTANT LESSONS Trade liberalisation reduced self reliance on food for all countries except Sri Lanka If SACs had not taken protective measures and allowed free trade then self reliance on food would have gone very low Need to keep check on import if liberalisation does not improve export to pay for import

INFERENCE oShare of export in GDP declined for all countries except India in post WTO period compared with pre WTO years oReason: Market access in developed countries did not improve

FOOD SECURITY ISSUES AND TRADE LIBERALISATION  Should food security be based on self reliance rather than self sufficiency:  Yes, at country level  At household level: Yes, if volatility in international prices can be absorbed by consumers  Food share in expenditure and magnitude of volatility  Prospects of diversification and trade-off with exports

IMPORTANT LESSONS FROM WTO AGREEMENT  Initial post WTO years generally not adverse  After 1998 as international prices declined: Agricultural exports declined Imports increased contrary to global trend  Agriculture growth rate adversely affected  Important lessons from this experience: In Import: Moderate tariffs are inadequate to guard against volatility SACs need either very high bound tariff or special safeguards to regulate imports of sensitive products In exports: Seek better market access SSG in developed countries Some have variable tariff SPS measures

FUTURE STRASTEGY OF SAC z Seek phasing out of measures that distort international prices z Reasonable protection for their market. z Seek more market access in developed countries’ markets zWeigh special product gains against sensitive product to others zExamine the cost of delay in concluding new round

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