Domestic farm reforms can help trade talks

Exim Matters

 Twenty-two developing countries, led by India, China, Brazil and South Africa, now labelled as the G-22, have jointly taken a strong position against farm subsidies in developed countries.

 However, whatever happens to farm subsidies in rich countries, it is unlikely that India can gain much unless it pushes reforms in the domestic agriculture sector.

 Indian agriculture faces poor rural infrastructure, credit delivery systems and falling yields. A skewed fertiliser pricing policy and unrealistically high procurement prices of food grain are unsustainable. It is the domestic policy that makes Indian agriculture uncompetitive, compared to other G-22 countries.

 So, even if the rich countries lower farm subsidies, India may find that other members of the trade union are deriving a lot more advantage.

 The European Union (EU) contends that the G-22