Growth of the Agricultural Sector of India Under the Globalisation ERA

Abstract

Agriculture sector provides employment to large number of people, raw materials to industrial units and food for survival to all. The introduction of scientific farm technology during mid-sixties has increased the agricultural production and the country turned out from a position of deficit in food grain production to surplus one. Globalization of the economy implies universalization of the process of production and trade. Globalization demands the formation of more open competitive society. It also means shedding primarily domestic orientation and adopting a more global out look. Globalization of agricultural sector opens the free market forces through free exports and imports of agricultural commodities. The main feature of World Trade Organisation (WTO)- Agreement on Agriculture (AoA) is opening up of world market for agricultural products. AoA contains provisions in the broad areas of trade and agricultural policies, market access, export subsidies and domestic support. As a matter of fact, WTO rules permit quantitative restriction to be retained in case of balance of payments difficulties. Out balance of trade is not showing any surplus for the post several years since our imports exceed exports. Under this situation, using the provisions of WTO rules, India can very well use quantitative restrictions also in cases where they are required. Moreover, the WTO agreement requires a reduction in Aggregate Measure of Support and export subsidies only and support under all other categories are exempted.