No, Minister

Of course, the QRs need not be phased out overnight. For a developing country like India, there is a leeway of 10 years. There is a further requirement, called the minimum market access condition. This bites immediately, not after 10 years. Some 3 per cent of the domestic consumption of agro products must be on open general licence (OGL), rising to 5 per cent over six years. However, if a country is invoking Article XVIIIB on the balance of payments, this requirement can be waived. At the moment, India has recourse to Article XVIIIB although, when the next WTO review is held in June, this clause may also be junked. If that happens, the phasing out of QRs will have to take place before 10 years.

When quantitative restrictions are removed, imports are not duty free. For agricultural products, India has suggested tariff equivalents of upwards of 150 per cent. Dr Alagh has quoted a study which shows that the cost of production of farm products is lower in India. But that is precisely the point: India is generally price competitive in agricultural products, with the exception of isolated items like edible oils. This is on the basis of prevailing global prices. When global prices rise because of the Uruguay Round liberalisation, Indian agro products will become even more price competitive. Placing an item on OGL does not mean that it has to be imported, it is merely open for imports. If Indian agro products are price competitive, why should anyone import at even zero rate of duty? The argument becomes even stronger at 150 per cent plus duty levels.

In fact, trade liberalisation helps exports of agro products, provided that domestic liberalisation generates sufficient exportable surpluses. The only substantive point that the minister has, is that developed countries have been lackadaisical about agricultural liberalisation. One must also remember that the final package does not have as significant a liberalisation as was contemplated in the Dunkel Draft. That is indeed the reason why India should be much more aggressive about such liberalisation and not indulge in knee-jerk defensive reactions. Dr Alagh has been quoted as saying: "Such assumptions will cause great harm to our farmers". Taken out of context, this statement is correct. Let us not deprive Indian farmers of global prices.