The Telegraph
Since 1st March, 1999
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Three issues on farm trade in spotlight

New Delhi, Nov. 6: A high-level inter-ministerial group on farm trade talks, being held under the aegis of the World Trade Organisation, has decided that India will concentrate on reducing peak tariff rates on farm imports imposed by developed countries, protecting domestic support measures for the public distribution system and wresting limited rights to give export support subsidies.

The decisions of the group will soon be placed before the Union Cabinet for approval before India presents its case at the next round of consultations slated to be held Geneva later this month. As commerce minister Murasoli Maran still remains ill, agriculture minister Ajit Singh will pilot the Cabinet note and has held talks with selected Opposition leaders in a bid to widen consensus on the issue.

The bone of contention is the high peak tariff rates on imported farm products being charged by the US, Canada, European Union and Cairns group nations like Australia and New Zealand.

About a quarter of the tariff lines on farm products imposed by these nations is at rates of over 30 per cent. These include cereals, sugar, milk and milk products, tobacco, cotton and meat— areas where India has much at stake.

In contrast, India has significantly reduced farm tariffs and its rates are at far lower levels. “Our main problem is that of market access, which is not only being denied by imposing peak rates but also by imposing informal quotas,” top officials involved in formulating the Indian position said.

The US has been arguing that its average farm goods tariff rate is but 12 per cent but Indian negotiators say that this is a misnomer as a fifth of its farm import tariff rates are in the above 30 per cent category.

India will of course take up the usual issue of trade distortions from inequity in domestic subsidy levels. While EU states and other nations have resorted to as high as 80 per cent subsidisation of their farms, India and other developing nations are not allowed to subsidise farms to more than 10 per cent of their total product value.

But since this is the most contentious issue in farm trade talks, negotiators say they will leave the issue open to a battle between the two main players—US and EU. Instead they will be concentrating on gaining support for their move that countries like India which need a degree of food security given its history of recurring droughts and floods and the volatile nature of the global food market.

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