Kerala Database

International Trade

K.N. Shymasundaram Nair

This presentation is based on extracts from a Discussion Paper entitled 'Towards Keralam's Preparedness to Meet the Challenges of, and to Profit from the Opportunities by India's Entry into World Trade Agreement' prepared for the Commission on WTO Concerns on Agriculture, appointed by the Government of Kerala under the Chairpersonship of Prof. M.S. Swaminathan.

In this extract an attempt has been made at farming out the dimensions of the WTO concerns relevant to Keralam's agriculture sector and the possible spread of the knowledge base that would help monitor the progression of the WTO regime on international trade so as to take proactive measures in order to ward off the adverse impact, and to capitalize from the opportunities. Shorn of the euphemism 'eternal vigil' on the WTO front is called for in order to prevent from derailing Keralam's agriculture and to ensure the livelihoods of those who draw sustenance from this sector of the economy. It must be remembered that, of all the states, the agricultural economy of Keralam is the most vulnerable to WTO trade regime as more than four- fifths of the agricultural production is either exported (pepper, ginger, cardamom, cashew, coffee and tea) or constitute raw materials for the industry in the country (rubber, coconut, copra and coconut oil).

Scope and Dimensions of WTO Concerns

The scope and dimensions of WTO concerns, both in breadth and depth, goes far beyond WTO regimes on markets and prices. It is widely known that the farm support system especially subsidies and other rights and entitlements especially ensuring livelihood security to the vulnerable groups apart from government investment in support services including research to sustain agricultural development is subject to WTO regimes. But much less known fact is the ramification of WTO regimes and their close links with IPRs (Intellectual Property Rights), which have tremendous impact on technology development, which is expected to provide the key input to make our agriculture competitive through cost-effectiveness and quality improvement. Yet another less known dimension but very significant to the socioeconomic context of the State is the inter-relationship between WTO regimes and the entry into the services sector and employment opportunities in the global market as trained and skilled human resources is assuming significance as a 'commodities' for export in this state. Above all, legal implications of the WTO regimes are pervasive in its operations at all levels both national and international as well. Given the scope and magnitude of the challenges and opportunities offered by the WTO regime, the Government of Keralam would have to formulate structured responses and crafting proactive measures the primary step is the creation of a knowledge base relevant to WTO concerns. The 'knowledge base' to be created which is the primary though not the only function of the Government, in order to productively service the WTO regimes is far more complex in spread (horizontal) and depth (vertical) than what is generally understood and much less appreciated.

The Knowledge Base

The knowledge base to be developed thus encompass the following:

Market information not only prices (both time series and cross sectional) but supply and demand as well in the local, national and international markets of not only the commodities. Commodities to be included are not only the immediate affected (coconut, rubber, cashewnut, pepper, ginger, tea, coffee cardamom) which by itself cover all the major farm commodities perhaps the exclusion of rice and vegetables, but their competitors (palm oil and other vegetable oils both edible and non-edible against coconut oil; synthetic rubber against natural rubber for instance);

Food, non-food and export uses of the commodities involved;
Cost of production of these commodities (local, national and international);

Production technology current as well as potential, and competitive products (synthetic cocoa in the place of natural cocoa), their cost- effectiveness, environment friendliness and sustainability;

Sanitary and phytosanitary measures;

Development investment including subsidies, support services, infrastructure development in the state, nation and countries which are our competitors;

Impact and measures to counter the impact on vulnerable groups in ensuring livelihood security;

Implications of tariff and non-tariff barriers not only directly on the commodities involved but also across the economy;

Legal implications at every stage and segment of the economy;

Marketing and infrastructural institutions;

Policies, strategies and programmes of the related departments and Agencies State and Centre.

The scope and dimensions of the knowledge base is summarised in the matrix designed below.

The commitment of the Government should not be limited to the creation and updating of the knowledge base but it should serve as the interface with the Government and the stake holders, principally the farmers but traders, processors and exporters, and their representative organisations, political parties and other opinion makers. Hence opportunities should be created to interact on a regular basis with all stakeholders. They include the departments, institutions and agencies including R&D of the State Government (apart from the Department of Agriculture but also Animal Husbandry, Fisheries and Forestry, State Planning Board, Law Secretariat, etc.) as well as of the Central Government (especially the Commodity Boards, Export Promotion Boards and institutions for R&D) and the NGOs.

Knowledge Matrix

	Coconut	Rubber	Cashew nut	Black pepper	Ginger	Cardamom	Tea	Coffee	Marine products
Major Domains
Market access
Domestic support
Export Competition/Subsidies
Sanitary and Phytosanitary measures
Trade Related Intellectual Property Rights (TRIPs)
Knowledge base
Market information including competing commodities.Prices (time series and cross sectional) Supply and demand (Local, national and international markets)
Cost of production (Local, national and international)
Production technology (current and potential) Competitive products (synthetic cocoa Vs natural cocoa)Cost-effectiveness, environment friendliness and sustainability
Sanitary and phytosanitary measures
Development investmentSubsidies, support services, infrastructure (State, nation and competing countries)
Impact and measures to counter the impact on vulnerable groups and ensure livelihood security
Implications of tariff and non-tariff barriers (not only directly on the commodities involved but also across the economy)
Legal implications at every stage and segment of the economy
Marketing and infrastructure institutions
Policies, strategies and programmes of the related departments and agencies State and Centre

Capability and Capacity of the Commission

The scope and desirable magnitude and dimensions of the commitments of the Government thus leads to the kind of enabling structure it should have. The key input is developing and sustaining by updating the knowledge base (It is amply explained that, knowledge base is not just a few sets of data but in addition encompass in-depth analysis of the wide rage of implications economic, technological, social, environmental and legal, and the interventions including strategies, policies, programmes). No single institution can assume the responsibility to generate the knowledge base required, and acquire self-sufficiency in expertise required to identify the problems and implications and suggest interventions. The diversity and range of talents and expertise required to fulfill the envisaged commitments cannot be developed in house. By and large the components of the knowledge base exist with different sources and databases. What is required is to access, compile, collate, analyse and interpret. Primarily therefore the Government has a facilitating rather than an executing role.