Moderate duties without import, export ban will help farmers: Paper

A discussion paper on the country’s farm exports and imports has suggested the government impose a moderate 5-10 per cent duty on most commodities and desist from banning exports or imports of any farm product.

The paper was written by agriculture economist and chairman of the Commission for Agriculture Costs and Prices, Ashok Gulati; joint director of the commission Surbhi Jain; and former Planning Commission member and chair professor of ICRIER’s Trade Policy and WTO Research Programme Anwarul Hoda. It said any export or import duty more than 5 per cent should be levied only if global prices collapse by 15-20 per cent below the trend line or rise by the same amount. The paper, Farm Trade: Tapping the Hidden Potential, was released on Thursday.

“The key issue to implement such a policy is to continuously monitor domestic and international price trends and identify trigger points for prompt action,” the paper said.

The paper suggests that under the Special Agriculture Safeguards Agreement under the World Trade Organization (WTO), bound tariffs be made flexible based on the prices agreed. At present, nations impose applied import duties up to 20 per cent as an agreement is still under works.

The paper also said exclusion of agriculture products from free-trade agreements entered with the Association of Southeast Asian Nations and also with Japan and South Korea was not in the interest of Indian farmers and impediments should be removed in two-way trade.

On specific commodities, the paper said the 50-80 per cent import duty on cereals (wheat and rice) should be drastically reduced to follow a neutral trade policy.

It also suggested export and import of pulses be fully opened instead of the current ban on export of pulses.

On edible oils, the paper said that as India is a major buyer of edible oils from Malaysia and Indonesia, it should impose an import duty equal to the export duties imposed by these countries.

It also advocated total lifting of the ban on import of oilseeds.

On cotton, the paper favoured a moderate duty whenever domestic prices cross a certain trigger point, instead of the current practice of total ban. On sugar, too, the paper favoured a stable policy instead of oscillating between full exports bans and high duties.