The breakdown of the WTO talks, agricultural subsidies and the role of India

The WTO talks are supposed to have failed principally because of disagreement between the US and developing countries (led by India, Brazil and China) regarding agriculture.

So I have been sleuthing a little around this matter and I see news today that India's Associated Chambers of Commerce (ASSOCHAM) is going to submit a paper to India's Minister for Commerce and Industry. Titled "Agricultural Subsidies: India Vs OECD Countries", the paper argues that India is at present subsidising its agriculture sector by a meagre 1.3 per cent of its GDP, as against 42 per cent by countries belonging to the Organisation for Economic Cooperation and Development (OECD).

More important, the respective share of the subsidy used to be 5% for India and 38% for the OECD, so the OECD is increasing its subsidy by this measure while India is decreasing it.

In 1947, when India became an independent country, the number of people in India involved in the agriculture sector was roughly 270 million. Now, the number of people involved in agriculture is something like 690 million.

Unlike farmers in the West who tend to be rich or at least reasonably well to do, India has only a few rich farmers and the vast majority of farmers are poor or even at subsistence level.

So it is not surprising that India needs to ensure that any WTO deal is going to benefit (or at least not harm) the majority of its farming population.

Indians may disagree about the best ways to achieve benefits for our agriculture sector, but every Indian is and ought to be concerned about the welfare of what is the largest sector of the Indian economy when measured by the number of people involved (that is 69% of our population). Sphere: Related Content