WTO & Trade-related NEWS + Agriculture In Kerala (ORGANIC FARMING !)

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In This NEWS Bulletin ********************************** 1. Suspended WTO talks likely to bring fresh troubles 2. India’s wheat import causes rise in global freight rates 3. ‘Kerala needs new farm policy’ - ORGANIC FARMING FARM WOES Suspended WTO talks likely to bring fresh trouble http://www.financialexpress.com/fe_full_story.php?content_id=148600 ASHOK B SHARMA Posted online: Monday, December 11, 2006 at 0048 hours IST NEW DELHI, DEC 10: Hoping to revive dying WTO negotiations, several think tanks are busy gauging the consequences of the situation. Talks regarding agriculture still remain a contentious and unresolved issue. Several experts believe that there is not much chance of reviving the Doha Development Round as the political situation in the US has seen a dramatic change. The newly elected Democrats-dominated Congress will takeover from January 1, 2007. The Democrats, who are critical of the global trade regime, will dominate different committees and act as pressure groups to any move or policy of the present US administration. The new Democratic chair of the Senate Agriculture Committee, Tom Harkin of Iowa, has also indicated that the WTO and Doha Agenda will not be a high priority, and he will focus much of his attention on expanding the Conservation Security Programme. US proposals on farm negotiations have come under fire from many developing countries, which have demanded cuts in farm subsidies. In this context, experts believe that no positive movement in farm negotiations at the WTO will be

possible at this stage and before the US fast track authority expires by July 2007. WTO director general Pascal Lamy has admitted, the “window of opportunity” has already passed. “I accept the WTO round will now not be completed before July next year… So this round will fail unless we get some sort of extension of the US Fast Track Authority.” In this situation many endorse the view expressed by commerce minister Kamal Nath who had earlier said, “No deal is better than a bad deal.” The developing countries should not rush for a deal, which is likely to place them at a disadvantage, they say. However, CUTS International has suggested that India should make efforts to revive and conclude the Doha negotiations as the country would gain from multilateral trade regime. It has said the cost of the suspension may have repercussions in terms of economic loss, negative impact on

geo-politics, setback to economic reforms and increase in trade disputes. It added that with multilateral negotiations under suspension, countries are entering into preferential trading arrangements, which are not a substitute to multilateral trade regime. CUTS also said since the launch of Doha Round in late 2001, exports from India have grown at a rate of more than 20% per annum. However, with its suspension, India may not be able to increase its exports, particularly in the farm sector, despite taking positive steps within the country, it said. “High growth was seen in spite of the fact that new round did not result in significant trade liberalisation. However, our share in world trade has increased only by 0.1% during the last 5 years. Contrary to this, China has been able to increase its share in world trade from 4.3% in 2001 to 6.6% in 2004,” the India-based CUTS International said. However CUTS views on India’s benefits under WTO regime are debatable. The country’s imports, too, have increased substantially. Whether India will be able to maintain its growth in exports in the suspension period is also debatable. However, the view that countries will enter into prerential trading arrangement, leading to a WTO-plus regime seems logical and is already happening. The most important point made by CUTS is the possible increase in trade disputes. The process has already begun like US imposing anti-dumping measures on several commodities. The CUTS study said rich countries have become more vulnerable to attract more disputes cases in the WTO in view of their huge farm subsidies and distorted trade practices. The developing countries, in this situation, would be hiring legal professionals from developed countries to fight their cases at high

cost-in the range of $500 to $1000 per hour plus other expenses like travel and stay. There is no provision in WTO for offering legal aid.---------------------------- India’s wheat import causes rise in global freight rates http://www.financialexpress.com/fe_full_story.php?content_id=148601 ASHOK B SHARMA Posted online: Monday, December 11, 2006 at 0049 hours IST NEW DELHI, DEC 10: Global sea freight rates for bulk tradable commodities have firmed up with reports of a new record of 37.7 million tonne steel production by China. According to analysts, 8.5 million tonne wheat import order by India has led to firming up of sea freight rates. As wheat import is being staggered in phases and congestion at Indian ports, the

imports would be carried on to next year. (India imported wheat despite a good domestic production of over 70 million tonne. This was done at the behest of USDA, which suggested opening up. Also the government was unable to procure from domestic market to replenish its stock). In the panamax market, the indices have gained some ground in both hemisphere but there has been a general lack of direction. At the same time the undertone continued to remain fairly steady and considerable volumes of new requirements are there, said a recent report by the freight investor. In Atlantic, it has been a case of too many vessels, which had earlier created a softening effect. However, there have been a number of new enquiries entering the market to offset this tone and the rates have started to climb up. Indian Ocean continues to be firm with good rates being paid, particularly for iron ore shipments. Pacific activity continues to hold well for owners with rates edging forward but the general impression is that a plateau is nearing. Rates from north Pacific/USWC area have firmed dramatically and again petcoke cargos for supermax type have pushed the rate upwards. The freight on US Gulf-India route for cargo size of 50,000 tonne has firmed up to around $48 a tonne, while that to Pakistan for a cargo size of 40,000 tonne has increased to $ 53 a tonne. The freight on Jordan-India route for cargo size of 25,000 tonne has firmed up $ 26 a tonne. The freight rate for North Africa-India route for a cargo size of 35,000 tonne is around $ 45 a tonne. Freight for Middle East-India (west coast) route, cargo size of 20,000 is around $28 to $38 a tonne. Freight rate for Jubail-WC india for cargo size of 20,000 tonne is around $19 a tonne. According to analysts,

record steel production in China and its exports and India's wheat import has caused the recent rise in freights. Freights mark an increase whenever these two populous countries import or export in good quantities. India's staggered import of wheat has generated a hope that imports would spillover to next year. ‘Kerala needs new farm policy’ - ORGANIC FARMING http://www.financialexpress.com/fe_full_story.php?content_id=148570 Posted online: Monday, December 11, 2006 at 0000 hours IST ASHOK B SHARMA NEW DELHI: Kerala needs a paradigm shift in policies and practices related to agriculture. More so, since farming conditions in the state are vastly different from the rest of the

country, feel experts. As the state grows cash crops, like pepper, cashewnut, cardamom, tapioca, coconut, tea, coffee and rubber, experts said organic farming should be encouraged and Kerala should be declared fully organic, as in the case of Uttaranchal. Noting that there was no agrarian crisis in the state and yet like a volcano ready for eruption, KRG Nair of the Centre for Policy Research, said at a seminar organised by the Kerala Development Society here last week, that there was need to evolve strategies at various levels. He cited the example of vanilla growers coming together to face problems due to the global price crash in the commodity. Some had become entretprenuers, he said. Nair said there was need for institutional measures linking production, marketing and processing of farm produce. According to Nair there is a need for institutional

measures linking up production, marketing and processing of agricultural produces. He suggests bee-pollination as a method for improving crop productivity. This would also help in promoting bee and honey industry. Some experts, however, disagreed with Nair and felt that Kerala had an agrarian crisis, what with the highest rate of farmer suicides and debt burden. Farming in the state is characterised by small landholdings with an average size of 0.33 hectare and crop yields lower than that in other states. Small landholdings are are a constraint for deployment modern technologies. The possible way out could be to go for organic farming. Experts had gathered at a conclave hosted by the Kerala Development Society hosted at Kerala House last week. The fomer Union agriculture minister, Som Pal who is now the vice chairman of the MP Planning Board

suggested organic farming and promotion of culture-based food habits. KP Kannan, member of the National Commission for Enterprises in the unorganised sector, said Kerala’s low crop yield could not be compared with other states where geographical conditions were different. Citing a paradox, he said Kerala farmers had the highest rate of income per unit land, whereas Punjab ranked second. Jacob John of the Institute of Social Sciences said though Kerala had the distinction of a good and vibrant system of local governments, it had failed to make an impact on agriculture. The reason, he said, was that village panchayats lacked expertise and resources. He called for a citizen-agri scientist-management expert partnership at the village level. He said that the village governments should be given incentives for their performances and their accountability ensured as being done in China.

Chairman of the Delhi-based Techno-Economic Research Institute, PC Bansal, said Kerala had the highest annual rainfall in the country, but much of the water flowed into the sea. Kerala’s network of rivers and rivulets presented an excellent opportunity for inland fisheries, he added. There are others who believe that Bansal's suggestion for inland fisheries would not be a viable option as the people in the state prefer seafood to inland fishes and transporting inland fishes to far off consuming states would not be economically feasable and competitive. However, Bansal's suggestion that the state should not concentrate on tea and paddy cultivation and go for other cash crops in which it is competitive found wide acceptance. Bansal pointed out that the state produces only 8% of the country's tea and most of the plantations are old and low in yields. The director of the Planning Commission, ND

George felt the need to integrate farmers with other sectors of the economy. Farmers should also go for livestock and animal husbandry, he said. The APEDA chairman, KS Money was of the view that farmers should produce what the market demands. -----

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