WTO Issues - NAMA and Agriculture + India's Wheat Import + Micro-enterprises

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NEWS Bulletin from Indian Society For Sustainable Agriculture And Rural Development ********************************* 1. NAMA draft endangers number of products in developing world 2. India to ask for revision of Nama draft in Geneva 3. Swaminathan moots trade body to protect farmers 4. India's Wheat Import - Wheat tender gets 530k-tonne

bid 5. Tobacco exports set to rise 6. Pawar to push for agriculture policy in Parliament next week 7. Micro enterprises now turn job spinners --------- NAMA draft endangers number of products in developing world http://www.financialexpress .com/news/NAMA-draft-endangers -number-of-products-in-developi ng-world/214070/ ASHOK B SHARMAPosted online: Sunday , September 02, 2007 at 2353 hrs IST New Delhi, Sep 2 The number of major labour-intensive industrial products of developing countries including India like textiles, clothings, leather, footwear, plastic, rubber, transport equipment, chemicals, machinery, furniture, and fabricated metals are likely to be endangered by a surge in imports, if the non-agriculture market access (NAMA) draft is not suitably amended. The discussions for multilateral trade is slated to resume in Geneva from September 3 after the summer recess and India will join other developing countries in demanding a revision of the draft released by Don

Stephenson, chair NAMA, in July, this year, said the commerce secretary Gopal K Pillai. The NAMA draft has proposed Swiss formula coefficients between 19-23 for effecting cuts in bound tariff rates, for developing and developed countries it has proposed coefficients between 8-9. This will lead to deeper tariff cuts in developing countries. A study done by the International Trade Union Confederation (ITUC) shows that if the NAMA draft is adopted in its present form the bound tariff rates on different products will be drast-ically reduced in the developing world, practically leaving no policy space to protect against any surge in imports. If the coefficient 19 is applied,India's bound tariff rate for textiles would decrease from 31.4% to 11.8%, for clothings from 42.3% to 13.1%, for leather from 35.2% to 12.3%, for footwear from 35.2% to 12.3%, for plastics from 40% to 12.9%, for

rubber from 35.6% to 12.4%, for wood from 36.5% to 12.5%, for transport equipment from 35.8% to 12.4%, for chemicals from 43.7% to 13.2%, for machinery from 28.2% to 11.4%, for furniture from 35% to 12.3%, and for fabricated metals from 39.5% to 12.8%. Similarly if coefficient 23 is applied, India's bound tariff rate for textiles will be reduced to 13.3%, for clothings to 14.9%, for leather and footwear to 13.9%, for plastic to 14.6%, for rubber and transport equipment to 14%, for wood to 14.1%, for chemicals to 15.1%, for machinery to 12.7%, for furniture to 13.9% and for fabricated metals to 14.5%. -------------------------- India to ask for revision of Nama draft in Geneva http://www.financialexpress.com/news/India-to-ask-for-revision-of-Nama-draft-in-Geneva/213342/ ASHOK B SHARMA Posted online: Wednesday, August 29, 2007 at 2325 hrs IST New Delhi, Aug 29 India would demand revision of the draft on non agricultural market access

for the WTO Doha round negotiations to move forward when it resume on September 3 in Geneva. "Any forward movement in farm talks seems difficult till the controversy over the draft on non-agriculture market access (Nama) is resolved," said commerce secretary Gopal K Pillai. Member countries and groups are likely to put up an extreme position in farm negotiation with no viable solution in sight, he said. He said 112 countries, including India, have out rightly rejected the draft circulated by the Nama chair Don Stephenson in July. Instead of discussing direct tariff cuts, the Stephenson draft has switched over to Swiss formula of coefficients, which suggests the developing countries to go in for deeper tariff cuts. "I think some revisions in the Nama draft may be made so that the negotiators can proceed with discussions on agriculture", he said. He, however, assured that India would not sacrifice its interests in agriculture for a better deal in services or Nama. In the services sector, India is interested in liberal movement of contractual service providers under Mode 4 of GATS. Accepting that the farm draft as balanced and good enough to restart negotiations, Pillai said, "It all depends upon how far the US would be willing to offer for cuts in its farm subsidies also particularly in cotton subsidies." Top officials in the US administrations

are resigning and the presidential polls are due in 2008. The situation is critical for the US to make commitments on farm subsidy cuts. In farm negotiations host of issues remains to be resolved, including the indicators for Special Products. The former Indian Ambassador to GATT negotiations, BL Das has suggested that India also ask for capping Green Box subsidies and fixing quantitative levels for triggering special safeguard mechanism against import surges. - Swaminathan moots trade body to protect farmers http://www.financialexpress.com/news/Swaminathan-moots-trade-body-to-protect-farmers/213314/ ASHOK B SHARMA Posted online: Wednesday, August 29, 2007 at 2218 hrs IST New Delhi, Aug 29 Noted agri scientist MS Swaminathan suggested setting up of the Indian Trade Organisation (ITO) to protect the farmers against fall in prices. "The government has already announced food security mission. Now, it should take steps to protect the interests of farmers," he said while delivering his address at a national consultation on "What the Doha Development Round means for India", organised by the Focus on the Global South here on Wednesday. Swaminathan said that the National Commission on Farmers under his chairmanship had suggested setting up of ITO for regulating domestic trade in agriculture in the interest of farmers. He said that the panel had also suggested a new method for calculating the minimum support prices for various crops, keeping in view the prevailing market dynamics. "About 93% of the food produced in the country

are consumed locally and therefore there is a need to set up ITO for this purpose," he said. "The provider of food need assistance. Why do you call it subsidy? Call it life-supporting assistance under Livelihood Security Box, which I have already advocated," he said. Swaminathan suggested that the government concentrate more on raising farmers' income. "We must added human dimension to agriculture rather than looking at it at a commodity angle," he said and added micro-retailers and small farmers' interests should be protected. He suggested setting up of farmers' commissions at state levels to protect the interests of

farmers. -------- Wheat tender gets 530k-tonne bid http://www.financialexpress.com/news/Wheat-tender-gets-530ktonne-bid/21333 ASHOK B SHARMA Posted online: Wednesday, August 29, 2007 at 2312 hrs IST New Delhi, Aug 29 The government received valid bids for 5,30,000 tonne wheat from six companies in the price range of $385 to $434 per tonne. Bids for the tender, which was floated by the State Trading Corporation of India (STC) on August 23 on behalf of the government, closed on Wednesday. The lowest bid was over 18% or $60 higher than the average rate of $325.59 per tonne at which the government contracted 5.11 lakh tonne wheat in the previous tender. A total of eight companies participated in the present tender with the bids of two firms being rejected on technical grounds, said a STC official. Glencore, which had offered to supply the maximum quantity of 3,00,000

tonne, was the lowest bidder. Cargill India offered 80,000 tonne, Toepfer International 70,000 tonne, Switzerland-based Ameropa 25,000 tonne and Starcom 5,000 tonne. Interestingly, another state-owned trading firm, PEC Ltd, has also entered the bidding process by offering to supply 50,000 tonne wheat of Australian origin, which it procured from the Australian Wheat Board. Concordia's bid was rejected while the offer of Yamuna Roller Flour Mills was not considered. The bids are valid till September 3 by which the government will take a decision on whether or not to import wheat against this tender. The wheat is for supply both in shipments and containers in the winter months between October and December. The tender stipulates delivery of wheat in parcel size of 25,000-75,000 tonne at Mundra, Kakinada, Tuticorin, Chennai Visakhapatnam and Kandla ports. However, at Cochin and Mumbai ports, the size should be between 25,000 tonne and 50,000 tonne. The State Trading Corp had floated two import tenders earlier this year and had bought 511,000 tonne wheat at an average price of $325 per tonne in June against a tender for 1 million tonne. Agriculture minister Sharad Pawar has said wheat purchases will be a regular feature this year as the government wants to build large stocks ahead of the next harvest in April. ----------------------------- Tobacco exports set to rise http://www.financialexpress.com/news/Tobacco-exports-set-to-rise/213832/0 ASHOK B SHARMAPosted online: Saturday , September 01, 2007 at 0148 hrs IST New Delhi, Aug 31 Tobacco exports are likely to touch Rs 1605 crore towards the end of current fiscal from about Rs 1506 crore last fiscal.

Tobacco growers are set to export more than 60% of their produce in view of rising demand in countries like Russia, Vietnam, the UK, Germany and Belgium, according to a study conducted by the Associated Chambers of Commerce & Industry (Assocham). The study said that domestic tobacco sector in the past few years has come out of ressession, the impact of which would be favourable and amount to higher tobacco exports. Export potential of Indian tobacco could be much more provided Indian farmers are paid reasonably well for growing tobacco crops proportionally as happens in leading tobacco growing countries such as Brazil & Zimbabwe. Tobacco farmers, in country like Brazil are paid $ 1.8 per kg as against $2 per kg in Zimbabwe. In

India, the tobacco growing farmer’s condition is poorer as they are paid only 80-90 cent per kg. On top of it, the tobacco industry is highly taxed particularly its cigarettes segment, in which the tax component is around 350% as against 70% in Brazil & Zimbabwe, said the study. Productivity is high in Zimbabwe at 3200 kg per hectare, whereas it is 1900 kg in Brazil and around 2,000 kg in India. However, tobacco leaves of Brazil and Zimbabwe contain high nicotine and a sizeable unwanted external content. Indian tobacco, on the other hand, contains negligible nicotine and other toxic matter and is famous for fascinating flavours. The Assocham’s assessment also reveals that in 2005-06 tobacco exports in quantity were 1.66 lakh tonne

and value terms the export realisation was to the tune of Rs 1404 crore. According to the figure available with Assocham during 2006-07, tobacco exports in value terms comprised Rs 1506 crore. In volume their quantity was estimated around 1.70 lakh tonne. This is despite that the tobacco industry had been facing some recession on account of export pricing in the past, trends for which now appear to be favourable. It is because of this that chamber has projected higher exports value for tobacco products as well as their quantity. Russia was the largest importer of Indian tobacco in 2005-06. It imported 27,513 tonne of tobacco (leaf and products) from India. It was followed by Belgium (15,411 tonne), Vietnam (7749 tonne), the UK (7721

tonne) and Germany 6354 tonne). During 2006-07, their imports respectively were Russia (27,950 tonne), Belgium(15,800 tonne), Vietnam (7949 tonne), the UK (7921 tonne) and Germany (6524 tonne) Among group the nations, West Europe, by importing 30 % (43,213 tonne) of Indian tobacco, was the largest importer. East Europe, which imported 40,167 tonne (20%), came in second. South Asia & Southeast Asia bought 31,656 tonne (22%),Africa 12,618 tonne (9%), West Asia 7,917 tonne (6%), North and South America 4,192 tonne (3%) and Australia 2244 tonne (2%) in 2005-06. ------------------------------- Pawar to push for agriculture policy in Parliament next

week http://www.financialexpress.com/news/Pawar-to-push-for-agriculture-policy-in-Parliament-next-week/213139/ ASHOK B SHARMAPosted online: Tuesday , August 28, 2007 at 2317 hrs IST New Delhi, Aug 28 The government has decided to place draft of the new national policy on farmers in Parliament in the next week. Speaking to mediapersons on Tuesday, agriculture minister Sharad Pawar, said, “I have personally requested Lok Sabha Speaker Somnath Chatterjee to allow us to present the draft of the national policy on farmers in Parliament next week.” Pawar said the government would float more global tenders for import of wheat to build up adequate buffer stock. He said that this year the government agencies have already procured 11.2-million tonne wheat for the buffer stock. “We need more wheat to build up the buffer stock to meet any contingency,” he said adding, “We need to float more tenders from time to time till we get right quality of wheat at right prices.” The minister denied

reports of Pakistan banning or withholding imports of Indian sugar. Earlier there were reports of Pakistan withholding imports of Indian sugar being done on government account. However the private importers in Pakistan are not debarred from importing sugar from India. Pawar said that areas under all-khraif (summer) crops have increased this year and he expected a bumper crop at the harvest. He, however, said that some crop damages were reported in Marathwada region and other places in the country due to bad weather conditions like floods and scanty rainfall at places--------------------------- Micro enterprises now turn job spinners http://www.financialexpress.com/news/Micro-enterprises-now-turn-job-spinners/213338/ ASHOK B SHARMAPosted online: Wednesday, August 29, 2007 at 2321 hrs IST New Delhi, Aug 29 Employment in the micro and small enterprise (MSE) sector grew at an estimated 4.11% per annum during 1997 to 2005 as against a 1.04% decline in the organised sector, according to estimates made by the Director General of Employment & Training. While employment in the organised sector dropped to 26.4 million in 2004 from 28.2 million in 1998, the micro and small enterprise sector registered a growth of 4.4% during the 10th Plan period (2002-07). This is against the 1.8% growth in the agriculture sector during the same time. “The MSE sector employs 67 million people in India and is the largest employment generating sector after agriculture. Hence, the sector provides one of the most viable avenues for absorbing the large surplus population engaged in the agriculture sector,” said the document on employment potential of micro, small and medium enterprises. The above findings come in the

light of increased liberalisation and globalisation, establishing the high employment generation potential of this sector and its ability to withstand the effects of the above phenomenon. Further, the micro and small enterprise sector has been registering a higher growth rate than the overall industrial sector in the past few years. The sector grew at 13% in 2006-07 as against 11.5% growth of the overall industrial sector. The sector accounts for an estimated 39% of the manufacturing output and 33% of the total exports of the country. The number of enterprises in the micro and small enterprise sector has increased to 12 million in 2006-07 from 0.4 million in 1971-72.

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