PRIME MINISTER'S SPEECH AT CONFERENCE OF CHIEF MINISTERS ON WTO AND AGRICULTURE AND FOOD MANAGEMENT
Following is the text of the Prime Minister, Shri Atal Bihari Vajpayee's speech at the Conference of Chief Ministers on WTO and Agriculture and Food Management, here today.
"I welcome you all to this important conference. It pertains to a subject, which both the Centre and all the State Governments regard as being central to the future direction of India's agriculture and our national economy.
It is also a subject that has engaged the attention of our kisans, like no other issue has done in the recent past. There are many apprehensions on how the unfolding WTO regime will impact Indian agriculture. Many of these apprehensions and fears are unfounded or exaggerated, as would become clear, I am sure, in the course of our discussions today.
At the same time, some of the concerns expressed by various socio-political organizations are indeed genuine. As a responsible and responsive Government, we felt it to be our duty to both allay the fears as well as deal with the legitimate concerns that all of us share.
It is out of this realization that I felt that a conference of Chief Ministers on this vital subject was urgently necessary. I thank several Chief Ministers, belonging to different parties, who made the same suggestion on their own. Since our intent is the same, and since our purpose is uninfluenced by considerations of party politics, I am confident that we will reach a broad consensus on the necessary course of action at the end of this conference.
The Government's approach to WTO and agriculture is based on our conviction that the emerging world trade regime is both a challenge and an opportunity for India. The challenges arise out of the fact that the WTO bears the birthmarks of a deeply divided world, in which the developed countries have many unfair advantages over the developing countries. India is playing an active role in mobilizing other developing countries for removing these disadvantages and establishing a truly just, equitable, and fair world trading order.
Contrary to the wrong impression being spread by some people, the record of recent years clearly shows that the Government has taken adequate measures to protect the interests of our farmers. Our hands are in no way tied to prevent us from taking further protective and promotional measures.
Since there is so much misinformation on this matter, I would like to elaborate:
Fears have been voiced that removing Quantitative Restrictions would dramatically increase agricultural imports. There have been allegations that uncontrolled imports are hurting Indian farmers. These fears and charges have been proved unfounded. Recent data released by the Commerce Ministry shows that removing QRs has not affected either our total imports or their composition. Non-oil imports have actually decreased by 14.7 percent in 2000 01.
The Government has taken effective action by way of adjustment of tariff, imposition of safeguard duties, anti-dumping duties in a number of cases. We have also established a Standing Group at the Centre to function as a "War Room" for tracking and analyzing imports of three hundred sensitive items including several agricultural products.
Since the present rates of import duty are less than the maximum possible rates, or what are called the bound rates, we have ample scope to increase our import duty still further if necessary. For fifteen sensitive items, whose maximum import duty had been historically set at zero or a low level, India was able to raise the maximum import duty in 1999 2000. India has not committed itself to providing minimum market access to other countries. The Agreement on Agriculture (AoA), came into force in January 1995. It has not reduced India's domestic policy options in any way. Our Minimum Support Price Scheme and the Public Distribution Scheme can continue without any hindrance. India does not have to reduce her domestic support and subsidy to agriculture. The present level of support is below the permissible level of ten percent of the value of agricultural production. India can continue to subsidize research, pest control, marketing, and providing various infrastructural support and extension services. India has adequate provisions under the Agreement on Agriculture to take effective steps in case of a sudden surge in imports. A new round of mandated negotiations on agriculture began on January 1, 2000. These negotiations will continue for two to three years. During these negotiations, we will argue strongly for a complete level playing field in global trade so that domestic producers do not suffer from any disability. The fundamental requirement of the GATT agreement since its inception, and later of the WTO, is that imports should not be subjected to more stringent rules than those applicable to domestic goods. By the same logic, imports cannot have any inherent advantages over domestic goods. The main point I wish to make is: Let there be no doubt in anybody's mind that our national interests are supreme for our Government and, indeed, for every other Government.
I say this with confidence because Indian negotiators at the WTO have developed sophisticated skills and sound knowledge of all the complex issues. This is in no small measure due to the intense debate that is taking place within the country on the various contentious issues thrown up by the WTO. Several State Governments have independently taken up in an in-depth study of the impact of WTO agreements on agriculture in their States. I particularly compliment Karnataka for its study, which makes many sound proposals to be implemented at the national, state, and sub-state levels. I urge other States to conduct a similar exercise, fully involving experts and all the social partners.
Dear Chief Ministers,
Liberalization of world trade in agriculture has opened up new vistas of growth. Agriculture is one of the areas in which India has an inherent strength to dominate the global markets. As we move away from an economy of scarcity to an economy of plenty, it is now both possible and necessary for us to fix our sights on the vast opportunities in the export market. At the same time, our country also stands exposed to price fluctuations in the world markets.
We cannot effectively address the issues arising out of WTO's Agreement on Agriculture, without urgently removing the many bottlenecks in food management. The success of this effort depends on the closest possible cooperation between the Centre and the State Governments. I would, therefore, like our Conference to produce a consensus action plan on some of the crucial imperatives.
Productivity Increase: A major challenge before us is to reduce costs and raise the productivity and quality of agricultural produce to global standards. This is necessary both to increase our exports and to ensure affordable food to our households, so that all our one billion people have nutritional security.
The possibilities of expansion of farm area are minimal. Hence, future increases in production have to come essentially through major improvements in productivity. For this, we need to quickly remove the obvious constraints such as scarcity of power, inadequate irrigation facilities, and poor rural infrastructure. This task also calls for a significant increase in science and technology inputs in agriculture, improved extension services, and raising the educational levels of our farmers.
It is highly disturbing that we waste enormous quantities of foodgrains, horticultural produce, vegetables, and the produce of the livestock and fisheries for want of adequate storage, post- harvest, and processing facilities. We can ill-afford to incur such huge losses. I would urge the State Governments to make full use of the many schemes for the construction of cold storages, rural godowns, etc. unveiled by the Centre recently, including the big opportunities in the National Storage Policy.
Falling public investment in agriculture is a matter of serious concern. Both the Centre and the States should use the available limited resources more efficiently, especially for capital formation. In addition, we must devise attractive policies to encourage private investment in agriculture, especially in extension services.
Crop diversification: Our strategy to raise foodgrains production has somehow remained confined to only two crops, namely wheat and rice. The production of coarse cereals has stagnated at about 30 million tonnes since the last thirty years. The production of pulses has in fact declined slightly since 1970. This is alarming. We need to revamp our strategy to attain self- sufficiency in pulses and edible oils.
Another attractive area of diversification is horticulture. The Government has recently approved a Technology Mission for Integrated Development of Horticulture to foster the rapid growth of the North Eastern Region. Similarly, the Eastern States, which have ample groundwater and fertile soil, need to be encouraged to become another national granary.
Procurement, Stocking, and Distribution: Our policy on procurement, movement, and stocking of farm produce originated when India was still suffering from scarcities. Now, although we have moved into an era of plenty, our policies and procedures have not changed suitably.
We have today surplus foodstock in our godowns whose value is estimated to be over Rs. 50,000 crore. The cost of centralized procurement, storage, and distribution is unacceptably high. This has resulted in both higher subsidies and higher issue prices. This has serious administrative and fiscal consequences, both for the Centre and for the States. Therefore, the time has come to look for better alternatives that will help the farmer, the consumer, as well as the Government.
As a first step, we propose to restructure the Food Corporation of India. This year's Budget has unveiled a new system of decentralized, state-level procurement and distribution. Instead of providing subsidized foodgrains, financial assistance will be provided to the State Governments to enable them to procure and distribute foodgrains to BPL families at subsidized rates. Since many State Governments are still unclear about the advantages of this new initiative, I would like the Finance Minister to give an exposition to the Chief Ministers.
The eminent agricultural scientist, Dr. M. S. Swaminathan, has made an interesting suggestion on the setting up of community grain banks to be administered by panchayats. Such ideas also deserve our serious attention.
Restriction of movement and stocking of agricultural produce has prevented farmers from getting the best price. Therefore, we should review the operation of the Essential Commodities Act and remove all restrictions on free inter-state movement of goods. Besides, the various Control Orders that limit the stocking of farm produce also require an urgent re-look.
Asset creation in rural areas: We must find an effective solution to the present anomaly between surplus foodgrains and hungry stomachs. It is both possible and necessary to improve our implementation of "Food for Work" programmes to create durable rural assets. However, this cannot be done without strengthening our district administration and increasing the monitoring role of panchayats. States need to learn from one another's success stories in this as well as in other areas.
A major programme where surplus foodgrains could be used for asset creation is the National Rural Roads Project. This is an ambitious attempt to achieve universal rural connectivity before 2007. It will also make a big contribution to employment generation and improving farm incomes. I appeal to all of you to extend your full support in this scheme's speedy and effective implementation.
I would like to conclude by restating the obvious: India can avoid the pitfalls and seize the prospects of freer global trade in agriculture only if we treat this as a national mission. This calls for collective and coordinated action by the Central and State Governments, and all those who are associated with agriculture and the food economy, like agricultural universities, Krishi Vigyan Kendras, farmers' cooperatives, credit institutions, and of course our hard working and innovative kisans. Let us fully mobilize the vast pool of our people's traditional knowledge, just as we harness the latest advances in technology. Let us together resolve to make India a leading agricultural power in the world in the 21st century.
Thank you".
May 21, 2001
PRIME MINISTER'S CONCLUDING REMARKS AT THE CHIEF MINISTERS' CONFERENCE ON WTO/AGREEMENT ON AGRICULTURE AND FOOD MANAGEMENT
Following are the concluding remarks of the Prime Minister Shri Atal Bihari Vajpayee, at the Chief Ministers' Conference on WTO/Agreement on Agriculture and Food Management, here today:
"I sincerely thank all the Honourable Chief Ministers for a very fruitful conference.
It is one of the most constructive and satisfying conferences of Chief Minister in the past three years.
The nature and depth of participation has shown that, cutting across party lines, all of us can adopt a common approach to the problems of agriculture.
This conference has laid a strong basis for a notional consensus on an effective action plan for the future.
Agriculture is a state subject. However, the challenges as well as the opportunities before Indian agriculture have made it imperative for the closest possible cooperation between the Centre and the States on a continuing basis.
One of the important issues on which we heard divergent views in today's conference is the proposed decentralized system of procurement of foodgrains.
I agree with some of the concerns expressed by the Honourable Chief Ministers. At the same time, you will appreciate the glaring problems in the present centralized system of procurement, under the aegis of the FCI.
I would like this issue also to be examined by the Committee which is going to be set up.
Shri Chandrababu Naidu, in his impressive presentation, has rightly pointed out that we cannot find an effective long-term solution to the many problems in agriculture by avoiding the hard decisions.
It is obvious that all these problems are inter-related. If we want to solve one problem for example, the problem of increasing productivity then we have to solve several other issues, such as power, irrigation, cheaper credit, rural infrastructure, etc.
None of these problems is easy to resolve. The Centre and the States have to work closely together at every step of the way.
But I am happy that we are steadily strengthening such a partnership between the Centre and the States. We had a useful conference on the problems in the power sector a couple of months ago.
I must record my sincere appreciation for the constructive and consensus approach that all of you adopted at that conference. The same was once again on display today.
As regards the WTO, I agree that we should no longer discuss the past. Let us look to the future with confidence and a common resolve.
One of the most important requirements is to enrich expert inputs into our deliberations and decision-making, both at the Centre and in States. This is also necessary for strengthening our market intelligence system.
Another pressing need is to effectively communicate all the salient aspects of the WTO and Indian agriculture to our kisans and to the people at large. In the absence of proper communication, many misgivings arise, which do no good to our ability to overcome the challenges.
As a first step, I would like the Commerce and Agriculture Ministreis to organize awareness- building meetings in all the State capitals, in collaboration with the State Governments.
Similarly, the Centre should benefit from the expertise developed by the States.
The Conference has once again highlighted the need for the States to share awareness about each other's success stories. For example, I was very happy to learn from Shri Digvijay Singh how Madhya Pradesh has implemented the Grain Bank Scheme as well as the programme to recharge wells.
By publicizing such innovative initiatives, all of us can benefit from the Ideas that Work.
Some Chief Ministers have referred to genetically modified food. The Department of Biotechnology would be happy to assist the State Governments in creating awareness about both the problems and the opportunities in this new area of technology.
The emergence of trade blocs is an important development in today's world. Some Chief Ministers rightly pointed out the need for India to secure the benefits of regional cooperation.
However, we should recognize that regional cooperation would entail some adjustment to be made by us in some areas, so that we can reap the benefits in some other areas.
As you know, this is an issue that came up during my recent visit to Malaysia. India has been trying to strengthen its relations with ASEAN, in the same way as we have done with the European Union.
I would like all of us, therefore, to take a holistic view of what is in the best interests of the nation.
Before I conclude, I must express my agreement with the suggestions made by several Chief Ministers that we need to evolve a consensus among political parties on the many issues that we discussed today. This would, in turn, help consensus action by the Central and the State Governments.
As suggested by many Honorable Chief Ministers, it has been decided to form a Committee on food management and agricultural exports. Terms of the reference are:
1. Enhancing the efficiency of procurement and reducing the cost of distribution of foodgrains under PDS through decentralisation and the active involvement of the States;
2. Strategy for diversification in agriculture;
3. Risk Management in agriculture through an effective Crop Insurance Scheme;
4. Review of the list of essential commodities and Control Orders to ensure free movement of agricultural products;
5. Implementation of Food for Work Programme and Grain Bank Scheme;
6. WTO agreement on agreement -- promotion of exports of agricultural products;
7. From the Centre, the Ministers who will be joining this Committee, or the members of this Committee are Agricultural Minister, Commerce and Industry Minister, Finance Minister, Consumer Affairs, Food and Public Distribution Minister, Rural Development Minister, Deputy Chairman, Planning Commission. The names of the Chief Ministers are like this: Chief Ministers of Andhra Pradesh, Karnataka, Orissa, Assam, Uttar Pradesh, Punjab, Madhya Pradesh, Haryana, West Bengal, Kerala and Maharashtra. The Committee will be supported by a group of Secretaries comprising Secretaries of Agriculture, Commerce, Expenditure, Food, Consumer Affairs and the Principal Advisor (Agriculture), Planning Commission as also the Chief Secretaries of the respective States.
That is all.
Thank you very much.":
