Question
WTO and Agricultural Exports
Answer :
Word Count : 1568
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Skip in 10
The World Trade Organization (WTO) plays an important role in shaping the international trading environment for agricultural products. For India, agricultural trade is particularly significant because agriculture provides livelihoods to a large section of the population and contributes substantially to rural employment, income generation and export earnings. India exports a wide range of agricultural commodities, including rice, spices, marine products, tea, coffee, sugar, cotton, fruits, vegetables, meat and processed food products. WTO rules influence the opportunities and constraints faced by Indian agricultural exporters through agreements dealing with tariffs, subsidies, sanitary and phytosanitary measures, technical standards and market access. The WTO was established on 1 January 1995 as the successor to the General Agreement on Tariffs and Trade (GATT). Agricultural trade occupies a special position within the WTO because agriculture is closely connected with food security, rural development, employment and the livelihood of farmers. The Agreement on Agriculture (AoA) was introduced during the Uruguay Round negotiations to establish disciplines concerning agricultural trade. Its major areas are market access, domestic support and export competition. These provisions have considerable implications for India's agricultural exports. Market access is one of the central principles of the WTO Agreement on Agriculture. Countries are required to convert many non-tariff barriers into tariffs and progressively reduce tariff barriers according to their commitments. India has generally maintained relatively high tariffs on several agricultural commodities to protect domestic farmers from sudden increases in imports. At the same time, improved access to foreign markets can provide Indian producers with opportunities to increase production and export earnings. The reduction of trade barriers in importing countries can therefore create opportunities for Indian agricultural products. India has a large and diverse agricultural production base, giving it considerable potential in international markets. It is one of the world's major producers of rice, wheat, milk, fruits, vegetables, spices, cotton and several other commodities. Rice, particularly basmati rice, is an important agricultural export. Indian spices such as chilli, turmeric, cumin, pepper and cardamom have strong demand in international markets. Agricultural exports also include tea, coffee, tobacco, sugar, oilseeds, marine products and processed foods. WTO-based trade liberalisation can help these commodities reach a wider range of international consumers. The WTO framework also addresses domestic support provided by governments to agriculture. The Agreement on Agriculture classifies domestic subsidies into different categories according to their effects on production and trade. The commonly discussed categories include the amber box, blue box and green box. Measures considered to have minimal or no trade-distorting effects, such as certain agricultural research, infrastructure and extension services, may fall under the green box. India has argued that developing countries require sufficient policy space to support small and marginal farmers, maintain food security and promote rural development. Domestic agricultural support is important for India's export competitiveness. Indian farmers often face high costs relating to inputs, irrigation, transportation, storage and marketing. Government programmes relating to agricultural infrastructure, research, extension, irrigation and other support measures can improve productivity and quality. However, WTO rules require governments to ensure that their support measures remain consistent with their international commitments. This creates a continuing policy challenge for India because
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