Subsidising Agriculture-A Cross Country View

A Cross Country View Ashok Gulati A N Sharma World agriculture is subsidised to the tune of 18 per cent of its value, with a range extending from 72.5 per cent in case of Japan to 54,5 per cent in Columbia (average 1982-87). Major exporters of agricultural commodities, like the US and the European Community subsidise their farm sectors by 26 and 36 per cent of their value, respectively Their exports distort the world commodity prices, transmitting wrong signals to cultivators in other countries. It leads to huge efficiency losses in the use of global resources, which must be checked. The Uruguay round makes the first serious attempt in this direction by attempting to bring agriculture under GATT, and proposing a gradual reduction in subsidies as delineated in the Dunkel Draft If Dunkel Draft has its way, world agriculture will gradually move to the developing countries and the Cairns Group. Indian agriculture is likely to prosper, inviting more resources purely on efficiency grounds.