Dead as Doha. But will come alive in 2010

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: support should be scrapped. But that can, at best, be an end-point goal. No country is in a position to contemplate that, not even the developed countries.

For instance, in EU, no substantial CAP (Common Agricultural Policy) reform is possible before 2012. Hence, negotiations are about how much one can get the developed countries to reduce domestic support and how much reduction do developing countries have to accept in return?

Finally, export competition used to be contentious, but is less so now. Developed countries will eliminate scheduled export subsidies by the end of 2013, with budgetary outlays reduced in equal installments by 50% by the end of 2010.

Developing countries would have a timeline of 2016 in some instances and 2021 in others.

India: agricultural liberalisation

How does India look at agriculture liberalisation? First, Indian agriculture has been in bad shape and agriculture remains important, notwithstanding the declining contribution of agriculture in sectoral composition of GDP or employment. While the reasons for this malaise have little to do with WTO and external sector liberalisation, there is a perception that trade liberalisation has contributed to problems. Policies are framed not just on facts, but perceptions too. Second, Indian agriculture may be price competitive in general, although India remains a marginal player still in agricultural exports. However, there are sectors like edible oils, dairy and poultry where India isn’t price competitive yet. In an overall macro sense, these may not be that quantitatively important. However, in a geographical and regional sense, there are areas where these are important crops. Adjusting and moving away from price uncompetitive areas is easier said than done. Therefore, it is understandable that the commerce ministry should be wary of market access commitments without sufficient safeguards.

In July 2008, the agriculture negotiations involved 37 countries. However, the high table in Geneva had the G-7 (US, EU, Japan, Australia, India, Brazil and China). Had G-7 agreed, DDA would have come to a successful conclusion. But G-7 didn’t agree and this happened over the SSM clause alone.

The SSM clause, remember, is something available to developing countries to check excessive imports of farm products. WTO has to have an agreement on what would be the price and volume triggers that would warrant usage of SSM. There was no agreement on that. And there was no agreement on whether SSM duties could be above bound (that is, already-agreed maximum level) duties.

Breaking ranks