Page 279 - Failure to Triumph - Journey of A Student

production cost. In other words they want the subsidies which our government has extended to our
farmers should be deducted and the stuff exported at its actual cost or at the cost of production plus
the profit allowed. On the other hand the farmers of developed countries want to benefit themselves
by selling their finished products without deducting the subsidies. The implications are:-

The stuff which the US or European countries export is generally their surplus stock and
they want to dump it in the developing countries.

Such goods too have heavy subsidies given to their farmers by developed countries in the

form of pesticides, seeds, cheap water, power and fertilizers. But their farmers want to sell
it with subsidies added in order to have huge profits.

These two aspects are objected to by developing countries. The WTO has now 150
members. There have been violent protests and grumbling by farmers of both the developed
and developing nations. Negotiations to smooth out the differences and find a solution have
been going on for long time now. It is a fact that the subsidies are essentially given by
respective government to its agriculturists to boost the farm products. Last ministerial
conclave of the member countries met at Hong Kong in December 2005 to break the

deadlock for the first time.

The deal agreed upon by the developing countries led by India and Brazil gave rich
countries an eight-year time frame to end exports subsidies. This implied that countries like
US, European Union nations and Japan would phase out such subsidies by 2013. Whereas
developing countries wanted these be abolished by 2010. However the consensus was
arrived at for 2013 as requested by the developed countries. Once this target is achieved,

the phasing out of the export subsidies will lead to an increase in commodities prices
worldwide in the long run, thus, making farm products of poor countries more competitive.

However, what the developing countries have achieved out of these negotiations are known
as “Two Windows". One deals with “Special Products" and the other is for “Special
Safeguards Mechanism".

These windows have been allowed to prevent any rich country from dumping its surplus farm
products. Also under the arrangements, India will have the freedom to decide the products that can be
put in these windows and prevent “Unfair dumping".

WTO is facing problems because there is a big gap between developed and developing countries.
The first problem is the disparity in agriculture subsidies and labour standards. Second problem is on

Intellectual Property Rights and third problem area is Environmental Pollution. Viewpoints were
different from the developed and developing countries, but gap will be narrowing with the passage of
time.

Following are the implications for our country:-