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India subsidises its farm sector by 1.3 p.c. of its GDP

Special Correspondent

This is 42 in OECD, says Assocham "This only goes to prove that ever since WTO was signed, while India rationalised its commitment by significantly curtailing its agricultural subsidies as against developed countries move which enhanced its agricultural subsidies to 42 now against its previous level of 38."

NEW DELHI: India is subsidising its agriculture sector by a meagre 1.3 per cent of its GDP as against 42 per cent by the Organisation for Economic Cooperation and Development (OECD).

An Assocham paper on "Agricultural Subsidies: India Vs OECD Countries" while highlighting this asked developing countries to build adequate pressures on developing nations in future WTO negotiations whenever scheduled to force them to phase out their agriculture subsidies by 2013 as promised in the WTO Hong Kong Ministerial Conference.

It also points out that OECD which is the club of rich nations when WTO was signed were extending agriculture subsidies to their farmers at 38 per cent of their GDP, while India's agriculture subsidy than stood at the level of less than 5 per cent of its GDP.

Commitment rationalised

"This only goes to prove that ever since WTO was signed, while India rationalised its commitment by significantly curtailing its agricultural subsidies as against developed countries move which enhanced its agricultural subsidies to 42 per cent now against its previous level of 38 per cent," highlights the Assocham's Paper.

Assocham president Anil K. Agarwal said that the commitment given out by the developed world at the concluding session of WTO Hong Kong Ministerial Conference for phasing out farm subsidies by 2013 should be closely monitored by developing countries to ensure that it is honoured in letter and spirit.

Agricultural subsidy

It further says that in the year 1999, $ 361 billion worth of agricultural subsidy was extended by OECD countries alone in which India's total national income was $447 billion, meaning thereby that more than 80 per cent of India's national income is being given by rich countries as subsidy to their agriculture.

The paper asked for the level playing field and seeks removal of restrictions on India's agriculture exports to developed world.

Paper to be submitted

The paper which will be submitted to the Commerce and Industry Minister points out "ever since India became independent agriculture had a population of 75 per ent, now it has come down to 69 per cent, giving the impression as if agriculture pressure has been alleviated. No, because that 75 was of 360 million people, 27 crore. Now, we are a billion plus and 692-700 million people are on agriculture as against 270 million at the time of independence."

``Do not tax agriculture''

It therefore seeks that agriculture sector should not be taxed and India needs to readjust and rework its subsidies extension mechanism 40 per cent of which is cornered by its fertilizer sector as the fertilizer prices are deliberately kept depressed.

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