Yes, Minister

These are legitimate criticisms and economists will continue to argue about them. Some problems can be handled through simulation exercises and these show that NPC results are fairly robust. That is, slight perturbations affect the actual figures, but do not alter the substantive conclusion that Indian agriculture is price competitive, barring products like oilseeds and sugarcane. The agriculture minister has argued that once quantitative restrictions are removed, wheat may be dumped into India. There are three problems with this assertion. First, quantitative restrictions can no longer be maintained under WTO (World Trade Organisation) disciplines. Second, when import licensing is phased out, imports are not duty free. The tariff equivalents of 150 per cent plus that India has suggested are substantial, a point made by the finance minister. Third, even without duties, the NPC figures show that fears of an import deluge are unwarranted. It is because of price competitiveness that India should be more

 

aggressive about liberalisation in developed countries. It is indeed true that developed countries have resorted to policy substitution and imposed non-tariff barriers (NTBs) through sanitary and phytosanitary measures. India needs to highlight these at WTO meetings. But in arguing for such liberalisation, the country needs to be clear about where its comparative advantage lies. As long as there is paranoia about Indian agriculture suffering from a comparative disadvantage, there will not be a coherent policy, even if the paranoia is not substantiated by facts. One will not have the domestic reforms required in agriculture to ensure that India is in a position to tap the potential thrown open by global market liberalisation. While the Cairns group of countries chugs along, policy makers will ensure that Indian agriculture remains backward.