RSD/11th Plan/04-05-071 WTO AND AGRICULTURAL POLICY IN KARNATAKA 11 th Plan Imperatives.
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Transcript of RSD/11th Plan/04-05-071 WTO AND AGRICULTURAL POLICY IN KARNATAKA 11 th Plan Imperatives.
RSD/11th Plan/04-05-07 1
WTO AND AGRICULTURAL POLICY IN KARNATAKA
11th Plan Imperatives
RSD/11th Plan/04-05-07 2
Why Get in to International Trade? Trends in Net Income from Agriculture
Stagnated Domestic Markets are Exploitative and
Market Margins are High Large number of Small and Marginal
Farmers Agricultural Trade Scenario in Karnataka
is Encouraging Agreement on Agriculture: Minuses and
Pluses Implications of Agreement on Agriculture
RSD/11th Plan/04-05-07 3
High and Low Points
Low Points Large share of drought –prone area
and meager supportive irrigation. Lack of capital formation. Large share
of Small and Marginal Farmers Domestic Market imperfections both
in the factor as well as product market. High density of low value crops with
high risk. Information Asymmetry
RSD/11th Plan/04-05-07 4
High Points
Emergence of high-tech and High Value agriculture.
Highly diversified sectoral Trade. Possibility of organising groups of small
producers. Availability of Ports Enterprising and Innovative Farmers Proactive Polity and Bureaucracy
RSD/11th Plan/04-05-07 5
Support of the Crop Economy
Emergence of Floriculture and Horticultural crops in the State.
Strengthening of traditional trade oriented crops: Coffee, Spices, Cashew, Groundnut, Grapes, Fruits,
Rise of New trade oriented crops like: Rose Onion, Gherkin, Nigerseeds, Vanila
Picking up of Agricultural Trade through KAPPEC
The stagnation during the last decade: 1997 to 2006
RSD/11th Plan/04-05-07 6
Table 1: Growth Rates in the Crop Economy:
1990-2000 Crops Area Production Productivity
Rice 2.55 2.09 -0.45
Ragi -3.22 -4.32 -1.14
Jowar -1.28 -4.54 -3.30
Bajra -1.40 -9.18 -7.89
Maize 7.75 6.86 -0.83
Wheat 3.98 4.78 0.77
Minor millets -6.68 -5.43 1.35Total cereals 0.14 -0.03 -0.17
Tur 1.50 -1.26 -2.72Total pulses 3.92 -1.11 -4.84
Total foodgrains 1.02 -0.12 -1.12
Groundnut -2.03 -10.4 -8.54
Total oil-seeds -3.81 -9.56 -5.98
Sugarcane -0.70 1.49 2.21
Cotton -3.01 -3.42 -0.42
Tobacco 5.74 4.75 -0.93
(Per cent per annum)
RSD/11th Plan/04-05-07 7
Agricultural Trade Scenario in of Karnataka
RSD/11th Plan/04-05-07 8
Karnataka’s Trade Performance
Note: 2005-06 dat pertain to April 2005-December 2005 Source: Karnataka Agricultural Produce Processing and Export Corporation (KAPPEC)
(Value in Rs. Crores)
Commodity 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 05-06* Coffee Pro 1183.93 957.53 881.42 730.65 757.57 705.65 749.98 Silk Prod 521.24 772.39 672.24 746.09 967.99 898.8 730.28 Cashew & Ker 251.55 187.98 163.54 279.83 265.72 518.35 302.76 Agri Proce Food Prod 195.33 237.91 349.51 366.99 361.25 362.41 213.58 Spices 61 73.74 69.12 91.65 99.58 109.54 154.76 Tobacco/pro 16.25 3.23 2.7 3.72 -- -- -- Rose Onion -- 38.62 48.35 39.38 51.5 52.57 19.51 Gherkins -- -- 120 139 140.7 141.3 213.96 Flowers 40.66 40 40 42 44 50 50 Total 2269.96 2311.4 2346.88 2439.31 2688.31 2838.56 2434.83 Total Exports 12854.25 16027.46 20145.58 29897.99 41670.24 62638.56 65455.18
RSD/11th Plan/04-05-07 9
Agricultural Exports from Karnataka
0
200
400
600
800
1000
1200
1400
Coffee Products Silk Products Cashew & Cashew Kernels Agricultural & ProcessedFood Products
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06*
RSD/11th Plan/04-05-07 10
Agricultural Exports from Karnataka
0
50
100
150
200
250
Spices Tobacco/ Beedi Bangalore RoseOnion
Gherkins Flowers
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06*
RSD/11th Plan/04-05-07 11
Total Value of Agricultural Exports from Karnataka
Total Agri Exports
0
500
1000
1500
2000
2500
3000
1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06*
Cro
*April 2005-December 2005
RSD/11th Plan/04-05-07 12
Agreement on Agriculture (AoA)
Market Access, Domestic Support and Exports Competition, Trade Related Investment Measures and Trade Related Intellectual Property Rights
Make clear distinction between types of subsidies. Tariff reduction obligation on Developed
countries-( by an average of 36 per cent over a period of 6 years) and developing countries –( by 24 per cent over a period of 10 years)
Agreement on Sanitary and Phyto-Sanitary (SPS) Measures provides ensuring the regulations given under the agreed rules
RSD/11th Plan/04-05-07 13
Implications of AoA on the Karnataka Agriculture Sector
Non Existence Level Playing Field – Small holdings and Weak farmers
Spurt in cheap imports of agri commodities and its consequences on food security, disincentive to the producers and price fluctuations.
Emergence and strengthening of foreign producers and traders
Infrastructural bottlenecks as deterrents. Lack of Information and presence of touts
RSD/11th Plan/04-05-07 14
Meeting the Challenges
Creating Strong groups (Chain) out of Weak(!) Links
Infrastructure as the Key Development intervention
Competing in the Market with Collective Strength Information Dissemination Formulation of short, medium and long
strategies to enhance the Export performance. More Number of Commodity based trade hubs
established and managed by Farmers
RSD/11th Plan/04-05-07 15
Favorable agro-climatic zones for varieties of crops.
Comparative advantage in the yields of Rice, Jowar, Bajra, Sugarcane and cotton.
Huge potential in exporting the commodities like coffee, cashew, cotton, sugar, tobacco, processed food products (fruits & vegetables), animal products, floriculture and coarse cereals
Innovative and enterprising farmers
Initiatives During 11th Plan: A SWOT Analysis:
Strengths-
RSD/11th Plan/04-05-07 16
Weakness-
Non-availability of infrastructure like water, quality power supply and roads
High land fragmentation and low productivity per unit area
Existence of weak marketing information system.
High Interest rates for Agriculture investment & export finance.
Vast gaps in yield and technology transfers
RSD/11th Plan/04-05-07 17
Opportunities-
Comparative advantage in primary agricultural, horticultural products and processed foods, floriculture, and other primary forest products
A three-point strategy of creating an incentive structure, providing infrastructure, facilitating a transparent system of export administration and reducing pre-export and post-harvest costs
Ease of handling commodities through the International Airport and Mangalore and Karwar Sea Ports.
Establishment of Farmers’ Export Consortiums bring together the farmers with small quantity of exportable surpluses to reap the advantages.
RSD/11th Plan/04-05-07 18
Threats- Import surges of agricultural products that in turn
likely to create welfare loss and disincentives for domestic producers.
MNCs are more likely to take advantages due to access to information about the world market.
Emerging new forms of QRs in the garb of Sanitary and Phyto-sanitary measures
On the negotiating platform of WTO, the partners from groups of countries (EU, Cairns Group) operate in unity among themselves whereas the opinion is divided among developing countries that makes the negotiations unsuccessful.
RSD/11th Plan/04-05-07 19
Action Points for 11th Plan
Participation of the State in Policy Discussion at the Centre with Min of Commerce
Identification of Priority commodities for trade needing particular attention. Coffee, Cashew, Silk and Other Produce.
Identification of Special Products and Special Safe Guard Measures
Establishment and strengthening of Commodity Boards with farmers’ Initiative
Understanding of the Special safeguard measures and Phyto sanitary measures
Revitalization of the WTO Cell and Dissemination of
Information and Establishment of Nodes of KAPPEC
RSD/11th Plan/04-05-07 20