Alexander Sarris, director, commodities and trade division, Food and Agriculture Organization (FAO) of the United Nations was in Delhi to participate in a commerce ministry seminar on the World Trade Organization (WTO). Sarris spoke exclusively to Mint’s Monica Gupta on one of the most contentious issues facing WTO.
Your view on the state of negotiations at WTO on agriculture...
The developing countries want to obtain something relevant for their development, while the developed countries are seeking market access. The developed countries have barriers against imports from developing countries. At the same time, the developing countries are also taking a defensive position, which is sometimes exaggerated.
What should the developing countries be doing?
Due to a lack of comparability between the domestic agriculture policy and the trade policy, the developing countries do not want to take any risks and take a maximalist position. There is a huge difference in case of some items between the actual import duty and the bound level (uppermost limit of the import duty to which they can go). They should undertake extensive research about what they will need in future and offer to reduce the tariffs from the bound levels on some items. This will give them a negotiating position to obtain what they want from the developed countries.
But developed countries like the US give huge farm subsidies which distort farm prices. How do developing countries tackle this?
The US’ position in WTO is based on its domestic policy. The developing countries should also allow their domestic policies to push their positions in WTO.
What is your outlook for the agriculture sector for the year in terms of prices and production?
The prices of the agricultural commodities in real terms is going to decline in the next 10–15 years, but the developing countries take should increase their productivity in agriculture. Whether agriculture is going to be a leading sector or not depends upon the strategy of the individual country.
Some developing countries are favouring manufacturing over agriculture. India has a good variety of crops and has the potential to make it a leading sector. However, this is for the Government of India to decide on in the future.
But the growth in the agriculture has been very low, at under 3%?
If India was to move into food manufacturing, it could support agriculture indirectly. India has been focusing on the raw agriculture items; it can expand into processing. There is a lot of opportunity there to export. The market is huge. China is one such huge market and India should try to grab a small portion of it.