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September 11, 1997


India suffered a major setback when it lost its case against the removal of quantitative restrictions on imports at the World Trade Organisation in Geneva recently.

The government, however, has decided to appeal against the WTO decision, Agriculture Minister Chaturanan Mishra said, while addressing the Economic Editors' Conference in New Delhi on Wednesday.

India had opposed the removal of restrictions on the plea that its balance of payments position was precarious and pleaded that these be phased out over a period of seven years.

The agriculture minister said that besides going in for an appeal at the world trade body, the government would also work on other options. At the domestic front, he said, the government would consult all the political parties for a consensus on the issue as the removal of quantitative restrictions would affect the farming community which consisted of small and marginal farmers who could not complete with their counterparts from developed countries.

He said India was under serious pressure from European countries and the United States to do away with the quantitative restrictions as these countries had taken the matter to the dispute settlement body of the WTO. The committee decided the case against India, Mishra added.

Mishra said India could not remain isolated at the world trade level, hence if ''we lose the appeal too ... we have to face the eventuality of losing the protective umbrella against dumping of agricultural products by the developing countries.''

He said India had competitive edge in the international market in some crops like wheat, mango, potato, banana, grapes, tomato and mushroom, but did not enjoy it in other crops like maize, oilseeds, pulses, jute and soyabean. The lifting of quantitative restrictions was likely to hit million of farmers who were engaged in the cultivation of less competitive or ''vulnerable crops.''

In preparing for the eventuality, Mishra said the agriculture ministry had categorised crops in terms of export competitiveness and would do every thing to raise the productivity of ''vulnerable crops.''

For this purpose, the ministry would approach the Planning Commission for more funds, which were needed for research and for enhancing credit facilities to the farming sector.

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