WTO Agreement on Agriculture and South Asia’s Farm Trade

Abstract

This study seeks to examine the impact of the Agreement on Agriculture (AoA) of the World Trade Organization (WTO) on the balance of agricultural trade of South Asian countries (SAC). The evidence suggests that AoA has failed to boost the SAC farm trade surplus. SAC, as a whole, are net losers in new trade regime. Further, analysis indicates that under the WTO regime, openness of Indian, Sri Lankan and Bangladeshi agriculture has increased. In sharp contrast, Pakistan’s agricultural economy has been gradually closed up. The need of SAC is to designate their food items as special products and to create an effective and proactive special safeguard mechanism for safeguarding their food security base, in order to shield the livelihood of millions of resource poor farmers from frequent farm imports surges.

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DOI: 10.1177/0971523112469482
2011 18: 27South Asian Survey
Ramphul
WTO Agreement on Agriculture and South Asia's Farm Trade
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WTO Agreement on
Agriculture and South
Asia’s Farm Trade
Ramphul
Abstract
This study seeks to examine the impact of the Agreement on Agriculture (AoA)
of the World Trade Organization (WTO) on the balance of agricultural trade of
South Asian countries (SAC). The evidence suggests that AoA has failed to boost
the SAC farm trade surplus. SAC, as a whole, are net losers in new trade regime.
Further, analysis indicates that under the WTO regime, openness of Indian, Sri
Lankan and Bangladeshi agriculture has increased. In sharp contrast, Pakistan’s
agricultural economy has been gradually closed up. The need of SAC is to desig-
nate their food items as special products and to create an effective and proactive
special safeguard mechanism for safeguarding their food security base, in order
to shield the livelihood of millions of resource poor farmers from frequent farm
imports surges.
Keywords
World Trade Organization, Agreement on Agriculture, South Asia, India,
Bangladesh, Sri Lanka, Pakistan, farm trade, food security, livelihood security, farmers
Introduction
Agriculture continues to dominate the economic scene of South Asian countries
(SAC).
1
Agriculture is an important source of gross domestic product (GDP), with
18.23 per cent of it originating in this sector in the year 2006–07. South Asia is
home to approximately 1.4 billion people, which is the largest regional population
in the world. In 2006, the population in South Asia ranged from 20 million in Sri
Lanka to 1,110 million in India.
One of the major issues in South Asia is poverty. Approximately 468.35 million
people live on less than $1 per day, representing 42 per cent of the world’s poor
(World Bank 2008). In fact, most of the SAC poor live and earn their livelihood
Article
South Asian Survey
18(1) 27–62
© 2011 ICSAC
SAGE Publications
Los Angeles, London,
New Delhi, Singapore,
Washington DC
DOI: 10.1177/0971523112469482
http://sas.sagepub.com
Ramphul is Assistant Professor, Institute of Management Studies and Research, Maharshi
Dayanand University, Rohtak, India. E-mail: ramphul.ramphul@gmail.com
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South Asian Survey, 18, 1 (2011): 27–62
28 Ramphul
in the rural areas. Agriculture helps to ameliorate the conditions of those who
belong to the lowest rungs of the social and economic strata. It softens the harsh
edge of extreme poverty in rural areas. Furthermore, agricultural production is
important for food security because it is a source of income for the majority of the
rural poor. Moreover, its strong forward and backward linkages within the rural
sector and with other sectors of the economy provide added stimulus for more
inclusive growth and faster income generation. The sector is vital for improving
the balance-of-payment (BP) position through accelerated export growth and effi-
cient import substitution.
The global farm economy has undergone unprecedented changes over the
last decade. The WTO (World Trade Organization) agreement on agriculture
(AoA), signed on 15 April 1994 and effective from 1 January 1995, with the
establishment of the WTO, has significant implications for SAC balance of farm
trade. The chief aim of WTO is to raise the living standard of the world’s poor
through optimal utilisation of world resources (Ramphul 2007). The multilat-
eral trading regime has been pushing countries hard to adopt an export policy as
their de facto development policy. The AoA of the WTO attempts to open up
substantial trading opportunities for leading agricultural producers and spur
development via gradual elimination of imperfections in world agricultural
trade (Ramphul 2008). To meet this objective, three chief provisions are made
in AoA: (i) market access, (ii) domestic support, and (iii) exports subsidies. As
notified by SAC governments to WTO and explored by a large number of other
studies (Bhalla 2004; FAO 2003; Hoda 2002; Ingco and Kandiero 2003;
Ramphul 2008), in terms of domestic support (product specific support + non-
product specific support) SAC agriculture has been net taxed rather than subsi-
dised right since 1986–88. In terms of market access obligation, SAC have not
only maintained the AoA bound rates, but have unilaterally reduced the most
favoured nation (MFN) tariff rates substantially compared to AoA final bound
rates (except some of restricted tariff lines) (Bhalla 2004; WTO 2002a, 2002b,
2004, 2006). Finally, in the case of export subsidies it has been found that SAC
have not provided any subsidy to agricultural exports, which is prohibited by
AoA provisions (Bhattacharya 2004; Jha 2001; WTO 1998, 2002a, 2002b). An
examination of the AoA provisions indicates that by gradual elimination of trade
distorting farm subsidies, it strives to establish a fair and free market oriented
world trade in agricultural commodities. It seems that in the emerging liberal-
ised farm trade order, countries having comparative advantage in producing a
commodity would dominate export in that commodity (Ramphul and Pal 2006).
Therefore, it is instructive to assess the capabilities of SAC farmers to become
competitive exporters of various agricultural commodities. Article 20 of the
AoA incorporates the provision to review the experience of member countries
regarding its implementation, and starts fresh negotiations for continuing the
process of opening up of world agricultural market and reducing distortions. A
new round of multilateral trade negotiations on agriculture has already begun in
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South Asian Survey, 18, 1 (2011): 27–62
WTO Agreement on Agriculture and South Asia’s Farm Trade 29
2000 and has reached a critical stage. This has created a piquant situation for
WTO member countries. It is, therefore, pertinent to estimate the impact of AoA
on SAC balance of agricultural trade. Analysis of agricultural trade perform-
ance will lead to formulation of appropriate strategies to grab the advantageous
opportunity thrown up by AoA of the WTO.
This article attempts to examine the impact of the multilateral trading regime
on SAC farm trade pattern. The rest of the article is structured as follows. The next
section sets out the objectives of the study, provides methods of analysis and men-
tions the sources of data. The analysis of SAC farm trade performance, decompo-
sition of overall exports growth, composition of farm trade and comparative
advantage in farm trade are presented in the section that follows. The final section
summarises the concluding observations and offers some policy implications.
Objectives and Methodology
The study is aimed at the following objectives: (i) to examine the impact of AoA
on balance of SAC farm trade and (ii) to work out SAC comparative advantage in
the exports of different crops. For analysing the data, various mathematical and
statistical techniques have been used. A brief discussion of the analytical tech-
niques/methods used is in order.
Compound Annual Growth Rate (CAGR)
To estimate CAGR the following equation is used:
Y=AB
T
Logarithmic form of the exponential equation:
log Y = log A + log B T (1)
Where,
Y: Dependent variable,
B: 1+g; g = compound growth rate,
T: Time.
The parameters A and B in the model are estimated by using Ordinary Least
Square (OLS) method.
The CAGR is computed by employing the following formula:
CAGR = [Antilog (log B) – 1]100 (2)
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South Asian Survey, 18, 1 (2011): 27–62
30 Ramphul
Nominal Growth Rate (NGR)
We can define:
f
1
= W
1
/W
0
;
W
1
= World agricultural imports in the current year, W
0
= World
agricultural imports in the initial year,
f
2
= (T
1
/T
0
)/(W
1
/W
0
); T
1
= Country’s agricultural exports in the current year,
T
0
= Country’s agricultural exports in the initial year,
f
3
= (T
0
/X
0
)/(T
1
/X
1
); X
1
= Country’s total exports in the current year, X
0
=
Country’s total exports in the initial year.
Now, the nominal growth rate is computed as per the following formula:
G = (R – 1)100; R = f
1
f
2
f
3
=
X
X
1
0
(3)
Where,
G : Nominal growth rate.
2
Net Terms of Trade (NTT)
The net terms of trade indicates the net gain/loss through foreign trade. It is
defined as the ratio of the price received for traded (export value index) to the
price paid for traded (import value index). Accordingly,
N
Vx
Vm
T
= 100
(4)
Where,
N
T
: Net terms of trade,
Vx =
Ec
Eb
100;E=
c
current year farm export value, E
b
= base year (i.e.,
1985–86) farm export value,
Vm =
Ic
Ib
100;I=
c
current year farm import value, I
b
= base year (i.e., 1985–86)
farm import value.
If N
T
> 100, then it indicates that terms of trade is favourable and vice versa.
Specialisation in Trade (ST)
The specialisation in trade is a net trade indicator. It is assessed by using the fol-
lowing measure:
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South Asian Survey, 18, 1 (2011): 27–62
WTO Agreement on Agriculture and South Asia’s Farm Trade 31
S
NetFarmTrade
TotalFarmTrade
T
=
More Specifically,
S
EI
EI
T
=
+
−
(5)
Where,
S
T
: Specialisation in agricultural trade,
E : Value of agricultural exports,
I : Value of agricultural imports.
The value of this index varies in range –1< S
T
<1. Negative value means that
the country is a net importer and vice versa.
3
Import Coverage Ratio (ICR)
The import coverage ratio is defined as the share of exports in imports.
Accordingly,
ICR
E
I
 100
(6)
Where,
ICR: Import coverage ratio,
E : Value of agricultural exports,
I : Value of agricultural imports.
Export Performance Ratio (EPR)
The export performance ratio (EPR), as suggested by Bela Balassa (1965), identi-
fies comparative advantage or disadvantage a country has for a commodity with
respect to another country or group of countries. The EPR is defined as the ratio
of the share of a particular commodity in the country’s total exports to the share
of that commodity in the world’s total exports.
4
The original index of EPR of i
th
commodity as formulated by Balassa (1965) may be expressed as:
EPR
EC
WW
i
ie
ie

/
/
(7)
Where,
EPR
i
: Export Performance Ratio of the i
th
commodity,
E
i
: Export of i
th
commodity from the country,
C
e
: Total exports of the country in reference year,
W
i
: World total exports of the i
th
commodity,
W
e
: World total exports in the reference year.
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South Asian Survey, 18, 1 (2011): 27–62
32 Ramphul
If the value of EPR is greater than unity (EPR > 1), it indicates that country has
comparative advantage in the export of commodity under investigation.
Sources of Data
The analysis is carried out for a time span of 21 years, from 1985–86 to 2005–06.
To estimate the impact of AoA on SAC farm trade, a simple before and after
approach is used. Accordingly, the whole period under analysis is divided into two
parts, comprising pre-WTO (1985–95) and post-WTO (1995–06) phases. For
both periods, various robust indicators of farm trade performance, namely (i)
annual average compound growth rate, (ii) sources of overall exports growth, (iii)
trade openness calculated as ratio of total farm trade (exports + imports) to GDP
agriculture, (iv) net terms of trade, (v) exports required to finance imports bill and
(vi) specialisation in agricultural trade, are estimated. Comparisons are made
between various indicators of trade performance during the ten-year period pre-
ceding the AoA (1985–95) and during the implementation period of AoA
(1995–06). In the present study, the term agricultural trade relates to the definition
of agricultural products under the AoA, that is, it excludes forestry and fisheries
products. The exports values are taken at free on board (FOB) prices and imports
values are based on cost insurance and freight (CIF) prices. It should be clear from
our discussion of the techniques/methods of analysis that we need information on
world total merchandise trade, world agricultural trade, SAC total merchandise
trade, farm trade and GDP agriculture. The data on trade are primarily computed
from Food and Agriculture Organization (FAO) Trade Yearbooks. The official web-
site of FAO (www.faostat.fao.org) is also used for the purpose. The data on GDP
agriculture are estimated from World Development Report, a publication of the
World Bank.
Performance of SAC Agricultural Trade Before
and After AoA
The analysis of SAC agricultural trade performance, during the pre- and post-
WTO phase, in the light of information generated by various mathematical and
statistical tools, is as follows.
Sri Lanka
A general idea about the impact of AoA on the agricultural trade of SAC can be
obtained by comparing trade performance indicators for before and after 1995,
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South Asian Survey, 18, 1 (2011): 27–62
WTO Agreement on Agriculture and South Asia’s Farm Trade 33
when the AoA came into effect. Table 1 depicts the performance of Sri Lankan agri-
cultural trade in terms of annual trade series, specialisation in farm trade, share of
farm trade in its total foreign trade, trade as percentage of GDP agriculture, exports
required for financing imports bill, net terms of trade (ToT) and share in world total
farm trade for the period 1985–86 to 2005–06. The table shows that the value of Sri
Lankan agricultural exports, which was shrinking in the pre-WTO phase, has grown
rapidly in the post-WTO phase. It plummeted from US$ 715.6 million in 1985–86
to US$ 375.5 million in 1994–95. This situation has reversed with the implementa-
tion of AoA. The agricultural exports have leapt substantially from US$ 672 million
in 1995–96 to US$ 1381.7 million in 2005–06. In sharp contrast to exports, agricul-
tural imports increased from US$ 354.5 million in 1985–86 to US$ 409.5 million in
1994–95. As a result, agricultural trade surplus turned down from US$ 361.1
million in 1985–86 to a trade deficit of US$ 34 million in 1994–95. After the entry
into effect of the AoA, the agricultural imports have grown at a slower pace than that
of agricultural exports. Within one year of the implementation of AoA, Sri Lanka’s
trade balance has moved from a deficit to surplus. It has widened from US$ 13.4
million in 1995–96 to a peak of US$ 371.6 million in 2005–06, which has helped in
narrowing overall trade deficit. The specialisation in agricultural trade (Equation 5)
has enhanced dramatically from –0.4 in 1994–95 to 0.16 in 2005–06, which sug-
gests the improved trade performance in the new trading regime.
Table 1 also shows that the share of Sri Lanka’s agricultural trade (exports +
imports) in world total agricultural trade, which dropped in the pre-AoA phase,
has witnessed an upward trend during the post-WTO period. It has risen from 0.10
per cent in 1994–95 to 0.16 per cent in 2004–05. This increase has mainly come
through an expansion of farm exports. This indicates the increasing importance of
the country in the world total farm trade. The share of Sri Lanka in world total
agricultural exports has increased from 0.10 per cent in 1994–95 to 0.18 per cent
in 2004–05, while in case of imports it has increased from 0.10 per cent to 0.14
per cent during the same period.
The annual average growth rates of value of SAC agricultural exports, imports
and net trade during the pre- and post-WTO phase are presented in Table 2. The
table exhibits that CAGR of Sri Lankan agricultural exports has increased from
–4.2 per cent during 1985–95 to 4.0 per cent during 1995–06. In case of imports,
it has slowed down from 4.7 per cent to 2.5 per cent during the same period. As a
result, agricultural net trade has expanded at a robust and steady annual average
tempo of 18.2 per cent during the post-WTO phase, which was declining at a rate
of 19.4 per cent per annum during the pre-WTO phase.
Table 1 also indicates that agricultural trade as share of GDP agriculture has
increased from 27.93 per cent in 1994–95 to 59.9 per cent in 2005–06. It indicates
that Sri Lankan agriculture has opened up. This increase has mainly come through
an expansion in agricultural exports. As a result, agricultural trade surplus as share
of GDP has widened from –1.21 per cent in 1994–95 to 9.31 per cent in 2005–06.
The ToT (Equation 4) for Sri Lanka’s farm trade has improved notably from 45.43
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Table 1. Time Profile of Sri Lanka’s Farm Trade
Year
Exports
(million $)
Imports
(million $)
Net Trade
(million $)*
Share in
World Total
Farm Trade
(per cent) Specialisation ToT
Exports Required
for Financing
Imports Bill
(per cent)
Farm Trade as
Share of Overall
Merchandise
Trade (per cent)
Farm Trade as
Share of GDP
Agriculture
(per cent)
1985–86 715.6 354.5 361.1 0.26 0.34 100 49.54 34.39 72.06
1986–87 575.7 338.5 237.2 0.21 0.26 84.25 58.8 29.75 59.8
1987–88 601.3 303.7 297.6 0.18 0.33 98.08 50.51 26.72 55.49
1988–89 637.2 426.8 210.4 0.18 0.2 73.96 66.98 29.23 63.15
1989–90 645.7 525.1 120.6 0.19 0.1 60.92 81.32 31.95 71.03
1990–91 745.3 493.7 251.6 0.18 0.2 74.78 66.24 26.88 65.73
1991–92 661.6 524.2 137.4 0.17 0.12 62.52 79.23 23.66 53.59
1992–93 634.5 587.7 46.8 0.16 0.04 53.48 92.62 20.63 53.61
1993–94 441.6 477.1 -35.5 0.13 -0.04 45.85 108.04 13.73 39.19
1994–95 375.5 409.5 -34 0.10 -0.04 45.43 109.05 10.35 27.93
1995–96 672 658.6 13.4 0.15 0.01 50.55 98.01 15.17 44.79
1996–97 875.5 767.6 107.9 0.17 0.07 56.5 87.68 18.13 53.69
1997–98 1079.2 856.9 222.3 0.21 0.11 62.39 79.4 18.84 58.31
1998–99 1063.9 832.5 231.4 0.21 0.12 63.31 78.25 17.87 57.49
1999–00 948.7 771.9 176.8 0.20 0.1 60.89 81.36 16.30 51.34
2000–01 1002.1 767 235.1 0.21 0.13 64.72 76.54 14.01 54.25
2001–02 952.4 718.7 233.7 0.19 0.14 65.65 75.46 15.56 55.27
2002–03 971.1 807.1 164 0.19 0.09 59.6 83.11 16.46 53.67
2003–04 1012 831 181 0.17 0.1 60.33 82.11 15.62 49.77
2004–05 1143 926 217 0.16 0.1 61.15 81.01 15.07 57.31
2005–06 1381.7 1010.1 371.6 n.a. 0.16 67.76 73.11 15.67 59.93
Sources: Computed on the basis of data available in FAO Trade Yearbook (FAO 2003b) and World Development Report (relevant issues).
Notes: * net trade = export – import; n.a. = not available.
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South Asian Survey, 18, 1 (2011): 27–62
WTO Agreement on Agriculture and South Asia’s Farm Trade 35
in 1994–95 to 67.76 in 2005–06, which had been deteriorating drastically during
the pre-WTO phase. It can be seen from Table 1 that the share of Sri Lanka’s
agricultural trade in its overall merchandise trade has increased from 10.35 per
cent in 1994–95 to 15.67 per cent in 2005–06, which showed a downward trend
in the pre-WTO phase. This reflects the increasing importance of the farm sector
as a source of foreign exchange earnings. The share of agricultural exports required
for financing the agricultural imports bill has come down during the post-WTO
phase: it declined from 109.05 per cent in 1994–95 to 73.11 per cent in 2005–06.
Here all the evidence supports the hypothesis that Sri Lanka has enhanced its
share in world total agricultural trade under the new trade order.
India
In the case of India, the largest economy in South Asia, at an absolute level the
value of agro-exports has been much higher than that of agro-imports, as shown
in Table 3. But while in the earlier period, the value of agro-exports was more than
four times of the agro-imports, in the later period it was higher by one and a half
times only. It follows from this that from 1995–96 to 2005–06, Indian agricultural
exports registered an annual average growth rate of 4.9 per cent, while imports
grew at the rate of 8.2 per cent. As a result, the annual average growth rate of net
farm exports has slumped from 14.8 per cent during the pre-WTO phase to 1.3 per
cent during the post-WTO phase: self-reliance in agriculture has worsened alarm-
ingly. Table 3 shows that Indian agricultural exports have increased from US$
2,264 million in 1985–86 to US$ 3,357.4 million in 1993–94. After taking a dip
to US$ 3,239.5 million in 1994–95 they further increased to US$ 5,849.50 million
in 1996–97. After a relative strong expansion in the mid-1990s—the farm exports
received a fillip with the WTO agreement during 1995–97, thereby resulting in
the net farm exports reaching US$ 3,644 million in 1996–97—India’s agricultural
Table 2. Annual Average Compound Growth Rates for SAC: Agricultural Exports,
Imports and Net Trade
(Per cent)
Country
1985–06 1985–95 1995–06
Exports Imports
Net
trade* Exports Imports
Net
trade Exports Imports
Net
trade
Sri Lanka 3.9 5.4 0.8 –4.2 4.7 –19.4 4.0 2.5 18.2
India 6.7 8.6 4.8 4.7 –2.5 14.8 4.9 8.2 1.3
Pakistan 1.5 3.9
7.3
a
–0.6 3.9
30.1
a
3.1 0.0 –3.6
Bangladesh
#
–3.2 6.5 8.3 –6.4 –0.9 1 –3.0 5.2 6.0
Sources: Computed on the basis of data available in FAO Trade Yearbook (relevant issues) (FAO
2003b).
Notes: *net trade = export – import (except Pakistan and Bangladesh where net trade = import
– export);
a
= 1990–91 and onward;
#
= up to 2005.
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South Asian Survey, 18, 1 (2011): 27–62
36 Ramphul
exports have declined in value term during the period 1998–2000. After declining
from 1997–98 to 1999–2000, farm exports further improved from US$ 4,949.60
million in 2000–01 to US$ 9,377.70 million in 2005–06. The table shows that
India’s farm exports have continued to grow since the AoA, but more slowly than
agricultural imports. The farm imports have been rising the sharpest: imports leapt
from US$ 1,910.3 million in 1994–95 to US$ 5,636.1 million in 2005–06. The
value of agricultural net exports has narrowed from US$ 1,329.2 million in
1994–95 to US$ 672.4 million in 1999–2000 before reaching to its peak of US$
3,741.6 million in 2005–06. In the post-WTO phase, India’s share in world total
agricultural trade has increased from 0.65 per cent in 1994–95 to 1.05 per cent in
2003–04. But this increase has mainly come through a sudden deluge in India’s
agricultural imports rather than through agricultural exports. India’s specialisation
in agricultural trade has worsened: it fell from 0.26 in 1994–95 to 0.14 in 2003–04
before reaching 0.25 in 2005–06.
Table 3 also demonstrates that India’s agricultural trade as a percentage of its
total merchandise trade has declined in the post-WTO phase. The share of farm
trade in total foreign trade has fallen from 9.48 per cent in 1994–95 to 7.33 per
cent in 2004–05. It indicates the declining relative importance of the agricultural
trade in the overall foreign trade of the country. The share of India’s agricultural
exports in its total merchandise exports has deteriorated from 15.04 per cent in
1993–94 to 11.42 per cent in 2005–06, while the share of agricultural imports in
India’s total merchandise imports has increased from 4.46 per cent to 5.07 per
cent during the same period.
The net terms of agricultural trade, which improved from 100 in 1985–86 to
234.4 in 1993–94, has significantly deteriorated to 121.3 in 2005–06. The share of
agricultural exports required for financing the agricultural imports bill has risen
sharply during the post-WTO phase: it climbed up from 58.97 per cent in 1994–95
to 85.51 per cent in 1999–2000 before coming down to 60.10 per cent in 2005–06,
obviously a negative outcome.
Table 3 also shows that India’s agricultural trade as a percentage of GDP agri-
culture has increased from 5.8 per cent in 1994–95 to 10.06 per cent in 2005–06.
It shows the rising trade orientation of Indian agriculture. The share of agricultural
imports and exports, in the GDP agriculture, has jumped up from 2.17 per cent for
agricultural imports and 3.86 per cent for exports in 1994–95 to 3.52 per cent for
imports and 4.86 per cent for exports in 2004–05. As a result, India’s agricultural
net exports as percentage of GDP agriculture have declined under the WTO
regime. It indicates that India’s agricultural foreign trade has outpaced the growth
in value addition in agriculture but this growth has been dominated by agricultural
imports. One of the possible causal factors for India’s farm import surges is the
biased policies of the AoA. For example, under the market access provision of the
AoA, India has removed the quantitative restrictions from imports of agricultural
products with effect from 1 April 2001 (Ramphul 2008). Moreover, under WTO
pressure India has withdrawn the additional duty on alcoholic beverages from
2008. At the same time, domestic support provision of the AoA has failed to force
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Table 3. Time Profile of India’s Farm Trade
Year
Exports
(million $)
Imports
(million $)
Net Trade
(million $)*
Share in
World Total
Farm Trade
(per cent) Specialisation ToT
Exports Required
for Financing
Imports Bill
(per cent)
Farm Trade as
Share of Overall
Merchandise
Trade (per cent)
Farm Trade as
Share of GDP
Agriculture
(per cent)
1985–86 2264 1650.5 613.5 0.95 0.16 100 72.9 15.63 7.19
1986–87 2376.1 1310 1066.1 0.84 0.29 132.23 55.13 15.15 5.65
1987–88 2383.1 1689.8 693.3 0.80 0.17 102.81 70.91 13.95 6.15
1988–89 2175.4 1902.3 273.1 0.70 0.07 83.37 87.45 11.89 5.32
1989–90 2657.1 1063.9 1593.2 0.60 0.43 182.07 40.04 9.83 5.22
1990–91 3074.7 1084.7 1990 0.61 0.48 206.65 35.28 9.81 5.3
1991–92 2796.2 742.4 2053.8 0.52 0.58 274.58 26.55 9.39 5.1
1992–93 2947.5 1366.6 1580.9 0.58 0.37 157.24 46.36 9.70 6.3
1993–94 3357.4 1044.2 2313.2 0.63 0.53 234.4 31.1 9.63 6.3
1994–95 3239.5 1910.3 1329.2 0.65 0.26 123.63 58.97 9.48 5.8
1995–96 4529.6 2225 2304.6 0.75 0.34 148.41 49.12 9.51 7.2
1996–97 5849.5 2205.5 3644 0.85 0.45 193.35 37.7 11.17 8.1
1997–98 5315.8 4053.7 1262.1 1.01 0.13 95.6 76.26 11.97 9.8
1998–99 5225.3 3832.9 1392.4 1.01 0.15 99.39 73.35 11.75 7.3
1999–00 4642 3969.6 672.4 1.00 0.08 85.25 85.51 9.89 6.9
2000–01 4949.6 2877.4 2072.2 0.91 0.26 125.4 58.13 8.10 6.9
2001–02 5233.9 3923.3 1310.6 1.06 0.14 97.26 74.96 9.51 7.7
2002–03 5521.6 4019.4 1502.2 1.04 0.16 100.15 72.79 8.09 8.1
2003–04 6504.4 4903.9 1600.5 1.05 0.14 96.7 75.39 8.89 8.3
2004–05 7058 5108 1950 0.96 0.16 100.73 72.37 7.33 8.4
2005–06 9377.7 5636.1 3741.6 n.a. 0.25 121.3 60.1 12.44 10.1
Sources: Computed on the basis of data available in FAO Trade Yearbook (FAO 2003b) and World Development Report (relevant issues).
Notes: * net trade = export – import; n.a. = not available.
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South Asian Survey, 18, 1 (2011): 27–62
38 Ramphul
the developed countries to withdraw their trade distorting domestic subsidies
(Ramphul 2007). Subsidies provided by developed countries cause an excess sup-
ply of agricultural products in these countries, which leads producers to dump it
into developing economies by cutting prices below long-run marginal cost, which
depresses world market prices (Ramphul 2006). It results in the developing coun-
tries being disadvantaged in exports and in competing with imports. The market
access provision of the AoA has failed to check tariff escalation in developed
countries’ markets (Cernat et al. 2003; Ramphul 2007). Another important factor
which also contributes to this phenomenon is an increase in demand of agricul-
tural commodities on account of both higher growth of per capita income and
increasing population pressure. Here all the evidence supports the hypothesis that
India has failed to avail the advantageous opportunity provided by the AoA of the
WTO.
Bangladesh
According to the WTO’s classification, Bangladesh is the least developed net-
food importing country. It is clear from Table 4 that Bangladesh’s agricultural
exports have increased from $103.3 million in the one year before WTO to $129.4
million in the initial year of the implementation of AoA. After taking a dip to $106
million in 1996–97, Bangladesh’s farm exports touched a peak of $157.8 million
in 1998–99. From 1999–2000 and onwards, agricultural exports have demon-
strated a marked decline.
5
On the other hand, agricultural imports have surged
from 586.3 million in 1994–95 to $1,984 million in 2004–05. The net result has
been that the annual average growth rate of Bangladesh’s farm trade deficit has
increased from 1 per cent in the pre-AoA phase to 6 per cent in the post-AoA
phase. It is shown in Table 4 that the share of Bangladesh in world total agricul-
tural trade has increased slightly during the post-WTO period. But this increase
has been dominated by a sharp rise in imports rather than exports. The specialisa-
tion in agricultural trade is worst and becomes highly negative.
Table 4 clearly brings out that the net terms of trade for Bangladesh have wors-
ened significantly after WTO. The share of farm trade in total foreign trade has
continued to decline despite the implementation of AoA. The share of Bangladesh’s
farm exports in its total exports has declined from 3 per cent in 1994–95 to 1.01
per cent in 2004–05, while share of agricultural imports in total imports has
increased from 23.75 per cent to 30.6 per cent during the same period. It is also
indicative of an absolute decline in agricultural output and exports. The steep
increase the ratio of trade to GDP agriculture from 8.5 in 1994–95 to 17.7 in
2005–06 indicates the increasing globalisation of Bangladeshi agriculture. The
import coverage ratio (equation 6) has slipped from 17.62 per cent in 1994–95 to
5.75 per cent in 2004–05, which indicates the increasing deficits of exports over
imports. It implies the need to import considerably more farm products than the
amount exported. This clearly indicates that the situation of agricultural trade in
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Table 4. Time Profile of Bangladesh’s Farm Trade
Year
Exports
(million $)
Imports
(million $)
Net Trade
(million $)*
Share in
World Total
Farm Trade
(per cent) Specialisation ToT
Imports
Coverage Ratio
(per cent)
Farm Trade as
Share of Overall
Merchandise
Trade (per cent)
Farm Trade as
Share of GDP
Agriculture
(per cent)
1985–86 229 853.3 –624.3 0.26 –0.58 100 26.84 30.14 13.44
1986–87 184.7 511.6 –326.9 0.16 –0.47 134.52 36.1 22.61 9.58
1987–88 155.9 591.1 –435.2 0.15 –0.58 98.28 26.37 22.15 9.03
1988–89 159.7 912.1 –752.4 0.18 –0.7 65.24 17.51 25.23 12.07
1989–90 163.9 795.1 –631.2 0.15 –0.66 76.81 20.61 22.46 12.47
1990–91 160.3 767.3 –607 0.14 –0.65 77.85 20.89 19.20 11.26
1991–92 145.9 643.5 –497.6 0.12 –0.63 84.48 22.67 16.34 9.92
1992–93 139.7 731.5 –591.8 0.12 –0.68 71.16 19.1 16.19 12.21
1993–94 123.2 671.3 –548.1 0.11 –0.69 68.38 18.35 13.73 11.05
1994–95 103.3 586.3 –483 0.09 –0.7 65.65 17.62 11.67 8.50
1995–96 129.4 1075.9 –946.5 0.13 –0.79 44.82 12.03 13.63 13.80
1996–97 106 1218.2 –1112.2 0.14 –0.84 32.42 8.7 13.55 17.34
1997–98 148.4 1369.3 –1220.9 0.16 –0.8 40.38 10.84 14.04 16.66
1998–99 157.8 1324.3 –1166.5 0.17 –0.79 44.4 11.92 12.26 13.88
1999–00 126.7 2072.6 –1945.9 0.26 –0.88 22.78 6.11 17.85 19.14
2000–01 99.1 1659.3 –1560.2 0.21 –0.89 22.25 5.97 13.02 14.93
2001–02 93.7 1400 –1306.3 0.17 –0.87 24.94 6.69 9.72 13.90
2002–03 100.3 1403.6 –1303.3 0.16 –0.87 26.63 7.15 10.61 13.75
2003–04 103.1 1833 –1729.9 0.18 –0.89 20.96 5.62 13.34 16.96
2004–05 114 1984 –1870 0.17 –0.89 21.41 5.75 11.72 17.66
2005–06 9377.7 5636.1 3741.6 n.a. 0.25 121.3 60.1 12.44 10.1
Sources: Computed on the basis of data available in FAO Trade Yearbook (FAO 2003b) and World Development Report (relevant issues).
Note: * net trade = export – import.
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South Asian Survey, 18, 1 (2011): 27–62
40 Ramphul
Bangladesh has worsened during the post-WTO phase: exports have been declin-
ing sharply, imports have shot up and trade deficit has risen very high. Earnings
from the farm trade have been shrinking for the poorest farmers. Here, the evi-
dence supports the hypothesis that the AoA of the WTO has failed to boost
Bangladesh’s agricultural net exports.
Pakistan
As is clear from Table 2, the annual average growth rate of Pakistan’s agricultural
exports has increased from –0.6 per cent during the pre-WTO period to 3.1 per
cent during the post-WTO period. In the case of imports, the annual average
growth rate has dropped from 3.9 per cent to nil during the same period.
Consequently, the trade deficit has been narrowing at an annual average rate of
3.6 per cent after the entry into effect of the AoA, which was expanding at a rate
of 30.1 per annum in the pre-WTO phase.
Table 5 shows that in 1999–2000, Pakistan’s agricultural imports as well
exports were at their peak. After 1999–2000, exports have grown faster than
imports, which has helped to bring down trade deficit. The share of Pakistan’s
agricultural trade in world total agricultural trade has shown a decelerating trend
during the post-WTO period. Pakistan’s farm exports could not keep pace with
the growth in exports of these commodities in the rest of the world. Table 5 also
indicates that after deteriorating in the initial year of the WTO regime, ToT for
Pakistan’s farm trade improved from 84.53 in 1994–95 to 103.53 in 2005–06, but
the ToT remains below in the post-WTO phase compared to the pre-WTO phase
(it was 195.87 in 1988–89). Agricultural trade as a share of total merchandise
trade has declined steeply under the WTO regime. After increasing during the
initial years of AoA—it increased from 21.84 per cent in 1995–96 to 23.81 per
cent in 1999–2000—it fell to 16.61 per cent in 2004–05. And this decrease has
come through a fall in exports as well as imports; as a result, specialisation in
agricultural trade has slightly improved. The specialisation in agricultural trade
improved from –0.26 in 1985–86 to 0.07 in 1988–89. From 1989–90 it started to
worsen to become –0.33 in 1993–94. It slightly improved from –34 in 1994–95 to
–24 in 2005–06, even if the trade balance was negative.
During the mid-1990s, agricultural exports worsened, but after this there is an
impressive reduction in imports which has helped in bringing down trade deficit.
As a result, import coverage ratio has increased from 49.79 per cent in 1994–95
to 60.98 per cent in 2005–06. As can be seen from Table 5, in the new economic
environment, agricultural trade as percentage of GDP agriculture continued to
slacken and became 19.3 per cent in 2005–06 in comparison to 30.36 per cent in
1986–87. Thus, the evidence supports the hypothesis that in the case of farm trade
Pakistan has failed to gain much from the WTO.
An examination of the pattern of SAC farm trade brings out that under the AoA
regime, their share, as a whole, in world total farm trade has increased from 1.10
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Table 5. Time Profile of Pakistan’s Farm Trade
Year
Exports
(million $)
Imports
(million $)
Net Trade
(million $)*
Share in World
Total Farm Trade
(per cent) Specialisation ToT
Imports
Coverage Ratio
(per cent)
Farm Trade as
Share of Overall
Merchandise
Trade (per cent)
Farm Trade as
Share of GDP
Agriculture
(per cent)
1985–86 700.8 1189.8 –489 0.46 –0.26 100.00 58.90 22.32 26.78
1986–87 1048.6 1142.9 –94.3 0.50 –0.04 155.77 91.75 24.73 30.36
1987–88 925.7 916.5 9.2 0.36 0.00 171.48 101.00 20.16 25.31
1988–89 1239.8 1074.6 165.2 0.40 0.07 195.88 115.37 21.16 25.90
1989–90 1488.6 1374.4 114.2 0.46 0.04 183.88 108.31 24.27 29.57
1990–91 986.7 1399.1 –412.4 0.35 –0.17 119.73 70.52 19.79 25.85
1991–92 1033.2 1204.8 –171.6 0.33 –0.08 145.60 85.76 16.07 21.39
1992–93 1236.9 1319.6 –82.7 0.34 –0.03 159.14 93.73 15.91 22.60
1993–94 870.1 1718.3 –848.2 0.37 –0.33 85.97 50.64 15.34 22.33
1994–95 685.2 1376.2 –691 0.26 –0.34 84.53 49.79 13.36 15.85
1995–96 1017.7 2425.6 –1407.9 0.38 –0.41 71.23 41.96 18.80 21.84
1996–97 1395.7 2087.3 –691.6 0.37 –0.20 113.52 66.87 17.31 20.66
1997–98 837 1815.7 –978.7 0.29 –0.37 78.26 46.10 13.64 17.21
1998–99 1153.5 2087.5 –934 0.36 –0.29 93.81 55.26 17.91 19.67
1999–00 1188.7 2455.1 –1266.4 0.42 –0.35 82.20 48.42 20.96 23.21
2000–01 1069.3 1718.8 –649.5 0.33 –0.23 105.62 62.21 13.72 17.40
2001–02 1019.9 1519.4 –499.5 0.29 –0.20 113.96 67.13 13.07 17.31
2002–03 1011.7 1563.8 –552.1 0.28 –0.21 109.84 64.69 12.18 18.96
2003–04 1284.1 1769.8 –485.7 0.28 –0.16 123.18 72.56 12.23 19.29
2004–05 1303.9 2208 –904.1 0.28 –0.26 100.26 59.05 11.21 16.61
2005–06 1785.036 2927.276 –1142.24 n.a. –0.24 103.53 60.98 11.42 19.34
Sources: Computed on the basis of data available in FAO Trade Yearbook (FAO 2003b) and World Development Report (relevant issues).
Notes: * net trade = export – import; n.a. = not available.
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South Asian Survey, 18, 1 (2011): 27–62
42 Ramphul
per cent in 1994–95 to 1.57 per cent in 2004–05. But this increase has mainly
come through growth in farm imports rather than through exports. The growth
pace of SAC agricultural imports and exports has jumped up from 0.8 per cent for
agricultural imports and 2.00 per cent for exports during 1985–94, to 3.9 per cent
for imports and 2.7 per cent for exports during 1995–2004.
6
As a result, SAC
agricultural export surplus has worsened under the WTO regime. Here, it may be
noted that the annual average growth rate of SAC GDP agriculture has improved
from 3.1 per cent to 3.8 per cent during the same period.
The fall in SAC farm trade surplus may be partially attributable to misuse of
Sanitary and Phyto-Sanitary (SPS) measures—which is a part of the AoA—as a
trade barrier by WTO member countries. For example, because of loopholes in
the SPS agreement, Indian agricultural exports are suffering from the disguised
protectionist policy of other countries. South African fruits are allowed in Kenya,
while Indian fruits and vegetables are not allowed. In the case of rice, while
importing non-basmati rice, Indonesia allows up to 25 per cent broken rice from
countries like Thailand, China and Vietnam, while it allows only 15 per cent in the
case of Indian rice. Furthermore, Australia does not approve Indian standards for
SPS, even though the hygienic conditions of egg processing plants in India are
well above or at least as good as international standards. The differences in the
application of rules regarding such restrictions are evident from the fact that
marine products were being exported to the United States throughout the period
when there was a ban imposed by the EU.
Decomposition of SAC Overall Exports Growth
The nominal growth rates (Equation 3) of SAC total merchandise exports dur-
ing the pre- and post-WTO periods along with their sources are presented in
Table 6. The table indicates that overall exports of India, Pakistan and Bangladesh
have grown by 167 [(R-1)100], 144 and 148 per cent during 1985–94, and by
116, 70 and 111 per cent during 1995–2004 respectively. In the case of Sri
Lanka, overall exports have grown by 139 and 54 per cent during the same peri-
ods, respectively. The decomposition of growth in overall exports brings out
that during the period 1985–2004 the bulk of overall export growth for
Bangladesh and Pakistan was due to diversification into non-agricultural
exports. In the cases of India and Sri Lanka, it is mainly associated with a gen-
eral expansion of world market for their agricultural exports. In the pre-WTO
phase, growth in overall exports was due to diversification into non-agricultural
exports in SAC. During the post-WTO phase, in the cases of India and Pakistan,
growth in exports due to active expansion of market shares of their agricultural
exports has dominated the other sources of nominal growth. In the case of Sri
Lanka, the growth in export has come primarily through gain in market share of
its agricultural exports. For Bangladesh, growth in overall exports has been
mainly driven by diversification into non-agricultural exports.
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South Asian Survey, 18, 1 (2011): 27–62
WTO Agreement on Agriculture and South Asia’s Farm Trade 43
Table 6. Decomposition of Nominal Growth of SAC Overall Exports
Year* Factor Sri Lanka India Pakistan Bangladesh
1985–04 f
1
2.872 2.872 2.872 2.872
f
2
0.581 1.018 0.515 0.183
f
3
2.416 2.416 3.020 12.443
R 4.312 7.061 4.468 6.530
1985–94 f
1
1.832 1.832 1.832 1.832
f
2
0.345 0.776 0.485 0.299
f
3
3.782 1.879 2.746 4.538
R 2.393 2.672 2.442 2.485
1995–04 f
1
1.376 1.376 1.376 1.376
f
2
1.495 1.269 1.104 0.678
f
3
0.751 1.242 1.230 2.264
R 1.545 2.169 1.707 2.112
Sources: Computed on the basis of data available in FAO Trade Yearbook (relevant issues) (FAO
2003b).
Note: * = two years averages are used as initial and current points to reduce the influence of a
single year outlier.
Composition of Farm Trade
An examination of farm trade structure indicates that SAC (except India) are net-
food importers. Wheat and rice are the most liked staple food products in all SAC.
FAO Trade Yearbook indicates that palm oil has emerged as the chief food import
item in all SAC. In SAC (except India) agricultural imports are widely diversified.
In contrast to imports, agricultural exports are concentrated on a few items. Less
diversified exports and widely diversified imports structure suggests less poten-
tial of gain through further liberalisation of trade. India is the most diversified
economy in terms of agricultural exports and the least diversified in imports. In
this respect, India could be benefited more by a higher diversity in exports (lesser
diversity in imports) than other SAC. Except in the case of India, SAC farm
exports are powered by a single commodity: jute for Bangladesh, tea for Sri Lanka
and rice for Pakistan.
Table 7 shows that under the WTO regime, the relative importance of some
commercial crops, namely tobacco and jute in Bangladesh’s agricultural exports
basket, has grown. In absolute terms, the export value of jute has fallen due to
reduction in both unit value and quantity exported. Increase in exports of tobacco
has been driven by an increase in quantity exported rather than in unit value. In
contrast, the exports earning of tea has declined both in relative and absolute
terms. This decline is supported by a fall in both unit value and quantity exported.
Besides, frozen food, leather and agro products such as vegetables, betel leaves,
tortoise, crabs and so on, are also exported by Bangladesh. The UN.com trade
database indicates that the major markets for these products are developed countries
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Table 7. List of Bangladesh’s Major Agricultural Exports Items
Commodity
Pre AoA (1992–94) Post AoA (2001–03)
Value
(000, $)
Quantity
(Metric tonne)
Unit Value
(000, $/tonne)
Share in Value of
Total Agricultural
Exports (Percentage)
Value
(000, $)
Quantity
(Metric tonne)
Unit Value
(000, $/tonne)
Share in Value of
Total Agricultural
Exports (Percentage)
a b c=a/b d e f=d/e
Tea 48620 26892.67 1.54 31.74 6458.33 5904 1.09 6.52
Tobacco 3600 961.33 2.13 1.57 4748 2480.67 1.91 4.79
Jute 104780 253338.3 0.32 61.97 67021.67 216818 0.31 67.68
Share of these commodities in total value of agricultural
exports (percentage) 95.29 78.99
Sources: Computed on the basis of data available in FAO Trade Yearbook (relevant issues) (FAO 2003b).
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South Asian Survey, 18, 1 (2011): 27–62
WTO Agreement on Agriculture and South Asia’s Farm Trade 45
as well as the Middle East and Southeast Asian countries, and in case of raw jute,
Pakistan, India and Brazil (UN Comtrade 2008).
FAO Trade Yearbook shows that in the new trade order, among the agricultural
imports the share of milk, butter, pope seed, dates, wheat, soybean oil, coconut
oil, animal oil, oilseeds cake, tobacco, natural rubber and copra has declined,
while pulses, onion, pimento, rice, maize, potato, tomatoes, apples, grapes, choc-
olates, sugar, meat meal and palm oil have emerged as Bangladesh’s chief agricul-
tural import items. Table 8 indicates that the imports of copra and animal oil have
dropped both in relative and absolute terms and this decline has mainly come
through a fall in quantity imported rather than their unit value. Imports of rice,
sugar and pulses have soared mainly through increase in the quantity imported.
The major sources of imports of farm commodities by Bangladesh are India,
Argentina, Poland and Russia.
Table 9 shows that the importance of some commercial crops, namely tea,
copra, pepper and pineapple in Sri Lanka’s agricultural exports basket has
increased. The export value of tea has increased more than twofold with the begin-
ning of the AoA. In contrast, the share of selected traditional exported items like
natural rubber, tobacco, bran and milling products has declined. The decline in
export value of rice has come through decline in its quantity rather than unit value.
Export of natural rubber has declined both in absolute and relative terms over the
years; therefore, total export earnings from natural rubber have declined signifi-
cantly. This decline may be partly attributable to fall in international prices of
natural rubber and an increase in domestic demand because of improvements in
rubber-based product industries. A comparison of unit value during 1992–94 and
during 2001–03 indicates that under the AoA regime, the unit value of all exported
items (except natural rubber) has moved up. The increase in tobacco export value
is derived by a rise in its unit value although the quantity exported has dropped. In
the case of tea, the quantity exported has grown faster than the unit value. Sri
Lanka’s agricultural export has been powered by a single commercial crop, tea,
which represented 65.33 per cent of total agricultural exports during 2001–03.
It can be seen from Table 10 that among Sri Lanka’s agricultural imports, chief
items are wheat, milk, sugar and pluses. During the post-AoA phase, the share of
wheat, rice, sugar and cotton lint in value of total agricultural imports has declined
while it has increased for milk, onion, pimento, tobacco, natural rubber, potato
and palm oil. Imports of rice and cotton lint declined in both absolute and relative
terms, and this reduction has come through a fall in both unit values of imports
and quantities imported. In absolute terms, the imports of all others commodities
increased both in quantity and value terms. Under the AoA regime, the unit value
of import of wheat, pulses, tea and sugar has increased, while it has declined for
potato, rice, palm oil, cotton lint, natural rubber, onion, apple and palm kernel oil.
In general terms, the increase in the value of imports has mainly come through
increase in quantity imported. The import of milk has shot up suddenly and
alarmingly. Sri Lanka is a net food-importing country. In 2005–06, food exports
represented only 30.51 per cent of food imports. Sri Lanka’s main food import
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Table 8. List of Bangladesh’s Major Agricultural Imports Items
Commodity
Pre AoA (1992–94) Post AoA (2001–03)
Value
(000, $)
Quantity
(Metric tonne)
Unit Value
(00, $/tonne)
Share in Value of
Total Agricultural
Imports (Percentage)
Value
(000, $)
Quantity
(Metric
tonne)
Unit Value
(00, $/tonne)
Share in Value of
Total Agricultural
Imports (Percentage)
a b c=(a/b)10 d e f=(d/e)10
Milk 65068 n.a. n.a. 9.81 63154.67 n.a. n.a. 4.09
Wheat 157973.3 1368667 0.12 23.83 238990 2201400 0.11 15.46
Rice 5753.333 34860 0.17 0.87 129341.7 782090 0.17 8.37
Maize 0 0 0.00 0.00 33786.67 259800 0.13 2.19
Pulses 16941.33 64694.67 0.26 2.56 98734.67 357397 0.28 6.39
Onion 15329.67 76939.67 0.20 2.31 29084.67 144358 0.20 1.88
Tobacco 12445.33 2589.333 4.81 1.88 15761.67 6928.667 2.27 1.02
Mustard 34161.33 112289.7 0.30 5.15 57711.67 153139.3 0.38 3.73
Copra 22217.33 56293.33 0.39 3.35 11216 30833.33 0.36 0.73
Animal oil 10918 32362.33 0.34 1.65 2468 7606.667 0.32 0.16
Soybean oil 83456.33 239348 0.35 12.59 205347.3 454213 0.45 13.29
Oil of palm 44420.33 100817
0.44 6.70 163286.3 425711.7 0.38 10.57
Sugar 18608 53733.33 0.35 2.81 86856.67 405426.7 0.21 5.62
Cotton lint 100903.7 68933 1.46 15.22 152808.7 118789.7 1.29 9.89
Share of these commodities in total value of agricultural
imports (percentage)
88.71 83.37
Sources: Computed on the basis of data available in FAO Trade Yearbook (relevant issues) (FAO 2003b).
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Table 9. List of Sri Lanka’s Major Agricultural Exports Items
Commodity
Pre AoA (1992–94) Post AoA (2001–03)
Value
(000, $)
Quantity
(Metric tonne)
Unit Value
(000, $/tonne)
Share in Value of
Total Agricultural
Exports (Percentage)
Value
(000, $)
Quantity
(Metric tonne)
Unit Value
(000, $/tonne)
Share in Value of
Total Agricultural
Exports (Percentage)
a b c=a/b d e f=d/e
Rice 2486.00 10713.33 0.232 0.51 1108.67 2243.33 0.494 0.11
Coconut 3566.00 17554.33 0.203 0.74 6193.67 23999.33 0.258 0.62
Coconut dessic. 30744.33 32984.33 0.932 6.35 26396.67 34228.33 0.771 2.65
Pineapple 364.67 653.67 0.558 0.08 1768.00 2206.00 0.801 0.18
Pepper 3825.33 3008.33 1.272 0.79 10498.00 5584.00 1.880 1.06
Tea 266807.00 143699.33 1.857 55.14 650120.33 294554.67 2.207 65.33
Copra 2866.00 4074.33 0.703 0.59 8986.67 14153.33 0.635 0.90
Natural rubber 48728.33 52087.67 0.936 10.07 27567.33 32993.00 0.836 2.77
Bran and milling
product
9766.67 159666.67 0.061 2.02 11704.67 147139.33 0.080 1.18
Tobacco 28676.00 3241.67 8.846 5.93 33597.00 2193.67 15.315 3.38
Share of these commodities in total value of agricultural
exports (percentage)
82.22 78.18
Sources: Computed on the basis of data available in FAO Trade Yearbook (1986–2003); official website of FAO (FAOSTAT 2008); Annual Report of Central Bank of Sri Lanka
(relevant issues) (CBSL 2003).
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Table 10. List of Sri Lanka’s Major Agricultural Imports Items
Commodity
Pre AoA (1992–94) Post AoA (2001–03)
Value
(000, $)
Quantity
(Metric tonne)
Unit value
(00, $/tonne)
Share in Value of
Total Agricultural
Imports (Percentage)
Value
(000, $)
Quantity
(Metric
tonne)
Unit Value
(00, $/tonne)
Share in Value of
Total Agricultural
Imports (Percentage)
a b c=(a/b) d e f=(d/e)
Milk 49839.00 n.a. n.a. 10.14 111899.67 n.a. n.a. 14.24
Wheat 123973.33 852766.67 0.15 25.23 125380.00 891500.00 0.14 15.96
Rice 39143.33 150320.00 0.26 7.97 12131.00 59653.33 0.20 1.54
Potatoes 2543.33 4312.33 0.59 0.52 10648.00 51213.67 0.21 1.36
Pluses 27694.33 63457.00 0.44 5.64 47174.00 131025.33 0.36 6.00
Onion 6564.67 26859.33 0.24 1.34 21229.33 122896.33 0.17 2.70
Apple 1326.33 1963.33 0.68 0.27 7370.67 18780.67 0.39 0.94
Sugar 95506.67 297720.00 0.32 19.43 119316.67 374856.67 0.32 15.19
Tea 2632.33 2027.67 1.30 0.54 8813.00 4565.33 1.93 1.12
Pimento 5098.67 4046.67 1.26 1.04 18736.33 25279.00 0.74 2.38
Tobacco 20866.67 1809.67 11.53 4.25 43588.33 3753.00 11.61 5.55
Natural rubber 6.33 1.00
6.33 0.00 4558.33 4715.33 0.97 0.58
Cotton lint 16901.33 11164.00 1.51 3.44 8342.67 6738.67 1.24 1.06
Palm oil 12772.67 30019.33 0.43 2.60 31115.00 81382.00 0.38 3.96
Palm kernel oil 2266.33 3879.33 0.58 0.46 14871.67 33397.33 0.45 1.89
Share of these commodities in total value of agricultural
imports (percentage)
82.85 74.49
Sources: Computed on the basis of data available in FAO Trade Yearbook (1986-2003); official website of FAO (FAOSTAT 2008); Annual Report of Central Bank of Sri Lanka
(CBSL 2003).
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South Asian Survey, 18, 1 (2011): 27–62
WTO Agreement on Agriculture and South Asia’s Farm Trade 49
items are wheat, milk, sugar and pulses, which together accounted for 51.39 per
cent of total agricultural imports during 2001–03. Sri Lanka spent annually US$
356.59 million on the imports of sugar, milk and wheat during 2001–03. Increase
in the imports of milk, palm oil and pulses may be because of increase in their
demand on account of higher growth rates of population and per capita income.
Increase in imports of sugar and potato may be partially due to decline in their
domestic production.
Table 11 exhibits that in the new trade order, the relative importance of sesame
seed, onion, potato, orange and cereals in relation to rice and wheat in Pakistan’s
agricultural exports has increased. This increase is generally supported by an
increase in quantity exported rather than in unit value. In contrast, the share of
selected traditional exportable items like cotton lint, wool, dates, pimento, choco-
late and tobacco has declined. Table 12 shows that during the post-WTO phase,
among Pakistan’s agricultural imports, the share of soybean oil, wheat, jute and
tea has declined, while pulses, soybean and cotton lint have steadily emerged as
Pakistan’s chief agricultural imports. Imports of wheat, tea and jute dropped both
in absolute and relative terms and this decline mainly came through reduction in
quantity imported rather than fall in unit value. The monetary burden of pulses
imports has increased while quantity imported has declined. Import of mustard oil
has presented the most striking growth.
Table 13 clearly displays that during the post-WTO phase, among the agri-
cultural imports the share of fruits, pulses and cashew nuts has declined while
edible oil, pulses and raw cotton have emerged as India’s major agricultural
imports. The import of palm oil has jumped up alarmingly. During the period
2001–03, palm oil accounted for 22.34 per cent of India’s total agricultural
imports. In absolute terms, imports of all major imported items, namely oil of
palm, oil of soybeans, cotton lint, cashew nuts, peas dry, pulses, fatty acids oils,
chick-peas and dates has increased and this increase has come through a jump
in the quantity imported. For edible oil, the major origins are Indonesia,
Argentina and Brazil, which together accounted for 91 per cent of total edible
oil imports in 2006–07. Major sources of imports of food and related items by
India are Indonesia and Canada; in the case of pulses it is Myanmar, Canada,
Australia and the United States of America.
Table 14 demonstrates that the exports of some commercial crops like sugar,
sesame seed, onion, groundnut and cereals like rice in India’s agricultural
exports have showed a remarkable increase and maintained their predominance
among the farm exports. Meanwhile, the share of traditional export items like
tea, coffee, castor oil and tobacco has decelerated. The export value of coffee
declined both in relative and absolute terms, and this reduction came through a
fall in unit value while the quantity exported increased. In case of wheat, rice,
onion, chocolate, tea, sesame seed and sugar, quantity exported has grown faster
than the exports value. Foreign Trade and Balance of Payments, a publication
of the Centre for Monitoring Indian Economy (CMIE 2006), indicates that the
major markets for these products are USA, China and Pakistan; in case of rice,
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Table 11. List of Pakistan’s Major Agricultural Exports Items
Commodity
Pre AoA (1992–94) Post AoA (2001–03)
Value
(000, $)
Quantity
(Metric
tonne)
Unit Value
(000, $/tonne)
Share in Value of
Total Agricultural
Exports (Percentage)
Value
(000, $)
Quantity
(Metric
tonne)
Unit Value
(000, $/tonne)
Share in Value of
Total Agricultural
Exports
(Percentage)
a b c=a/b d e f=d/e
Wheat 870.00 5000.00 0.17 0.09 132653.33 1333066.67 0.10 12.00
Rice 324715.00 722548.00 0.45 34.89 514337.33 1976056.67 0.26 46.54
Potato 378.67 2167.33 0.17 0.04 6385.67 58820.33 0.11 0.58
Onion 1712.33 14282.00 0.12 0.18 7158.33 70570.33 0.10 0.65
Orange 4219.33 31666.33 0.13 0.45 20230.00 108681.00 0.19 1.83
Pimento 7424.67 7316.33 1.01 0.80 2466.00 2365.67 1.04 0.22
Tobacco 4647.67 1394.33 3.33 0.50 6511.67 4714.33 1.38 0.59
Sesame 9135.00 16448.67 0.56 0.98 15823.33 34082.67 0.46 1.43
Cotton Lint 175836.00 168908.50 1.04 18.89 35784.33 47939.00 0.75 3.24
Dates 18827.33 41007.67 0.46 2.02 25671.67 72666.33 0.35 2.32
Natural Honey 119.33 59.33 2.01 0.01 1089.67 684.00 1.59 0.10
Chocolate 1795.67 1374.33 1.31 0.19
1310.33 903.67 1.45 0.12
Bran and Milling 2515.67 37958.33 0.07 0.27 1468.67 24410.67 0.06 0.13
Share of these commodities in total value of agricultural
exports (percentage)
59.33 69.75
Sources: Computed on the basis of data available in FAO Trade Yearbook (relevant issues) (FAO 2003b).
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Table 12. List of Pakistan’s Major Agricultural Import Items
Commodity
Pre AoA (1992–94) Post AoA (2001–03)
Value
(000, $)
Quantity
(Metric tonne)
Unit Value
(000, $/tonne)
Share in Value of
Total Agricultural
Imports (Percentage)
Value
(000, $)
Quantity
(Metric
tonne)
Unit Value
(000, $/tonne)
Share in Value of
Total Agricultural
Imports (Percentage)
a b c=(a/b) d e f=(d/e)
Pluses 63331.33 207659.7 0.30 4.30 209878 172209 1.22 12.97
Sugar 24423.33 67163.33 0.36 1.66 79070 311836.67 0.25 4.89
Wheat 350543.3 1664540 0.21 23.82 35843.33 188533.33 0.19 2.22
Oil of palm 394912.67 934776.67 0.42 26.84 409249.33 1145930.67 0.36 25.30
Cotton lint 45662.50 27211.50 1.68 3.10 209878.00 172209.00 1.22 12.97
Tea 189052.67 117342.33 1.61 12.85 171500.00 104788.33 1.64 10.60
Tallow 26095.67 67721.00 0.39 1.77 28593.33 78645.67 0.36 1.77
Chick-peas 33110.00 110113.00 0.30 2.25 46686.00 137148.67 0.34 2.89
Fatty acids oils 23434.67 79120.33 0.30 1.59 25162.33 103346.33 0.24 1.56
Jute 27159.00 93263.00 0.29 1.85 22952.33 85937.33 0.27 1.42
Beans dry 14701.33 44551 0.33 1.00 21314.50 76519.00 0.28 1.32
Natural rubber 22813.33 26585.67 0.86
1.55 25888 40050.67 0.65 1.60
Animal oil 26862 68878.67 0.39 1.83 29271.33 81513.33 0.36 1.81
Mustard 4.33 8.33 0.52 0.00 105816.7 275389 0.38 6.54
Share of these commodities in total value of agricultural
imports (percentage)
84.41 87.86
Sources: Computed on the basis of data available in FAO Trade Yearbook (relevant issues) (FAO 2003b).
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Table 13. List of India’s Major Agricultural Import Items
Commodity
Pre AoA (1992–94) Post AoA (2001–03)
Value
(000, $)
Quantity
(Metric tonne)
Unit Value
(000, $/tonne)
Share in Value of
Total Agricultural
Imports
(Percentage)
Value
(000, $)
Quantity
(Metric tonne)
Unit Value
(000, $/tonne)
Share in Value of
Total Agricultural
Imports
(percentage)
a b c=(a/b) d e f=(d/e)
Oil of palm 1285437 3270727 0.48 6.27 90269.33 189255.3 0.39 22.34
Oil of soybean 537257.7 1182651 0.72 2.14 30832 43072 0.45 9.34
Cotton lint 347022.3 285517.3 1.71 5.76 82895.33 48369.67 1.22 6.03
Cashew nuts 214708 335424 0.94 12.00 172856.3 184805.3 0.64 3.73
Peas 188879.3 806279.7 0.29 2.97 42801.67 149964.7 0.23 3.28
Beans 94775.33 299695 0.34 1.96 28162.5 82376.5 0.32 1.65
Pulses 210053.7 645375.3 0.31 4.46 64212.67 209636.3 0.33 3.65
Fatty acids oils 96548.67 308907.7 0.35 1.95 28082.67 81029.67 0.31 1.68
Chick-peas 116525.3 331203.7 0.37 2.44 35096 95106.67 0.35 2.03
Dates 37865 203215 0.29 1.46 21018.67 72373 0.19 0.66
Share of these commodities in total value of agricultural
imports (percentage)
41.39 54.39
Sources: Computed on the basis of data available in FAO Trade Yearbook (relevant issues) (FAO 2003b).
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Table 14. List of India’s Major Agricultural Export Items
Commodity
Pre AoA (1992–94) Post AoA (2001–03)
Value
(000, $)
Quantity
(Metric tonne)
Unit Value
(000, $/tonne)
Share in Value of
Total Agricultural
Exports (Percentage)
Value
(000, $)
Quantity
(Metric
tonne)
Unit Value
(000, $/tonne)
Share in Value of
Total Agricultural
Exports (Percentage)
a b c=a/b d e f=d/e
Wheat 6566.67 46033.33 0.14 0.21 454610 4163867 0.11 7.90
Rice 389442.3 746223.3 0.52 12.24 938197.3 3549640 0.26 16.31
Onion 56506.67 343769.3 0.16 1.78 100761.3 630353 0.16 1.75
Chocolate 648 264.6667 2.45 0.02 30025.33 18980.67 1.58 0.52
Tea 333745.7 156797.3 2.13 10.49 342414.7 177822 1.93 5.95
Tobacco 121408 76345.33 1.59 3.82 208945.7 120281.7 1.74 3.63
Pimento 21423.67 21877.33 0.98 0.67 59231 79372.33 0.75 1.03
Groundnut 30038.67 48690.33 0.62 0.94 69821.67 108146.3 0.65 1.21
Coffee 183446.7 115835 1.58 5.77 153566.7 1638917 0.09 2.67
Sesame seed 30719.33 44052.33 0.70 0.97 118059.3 175486.3 0.67 2.05
Castor oil 84904.67 126840 0.67 2.67 115408.3 159980.3 0.72 2.01
Sugar 67800 225290 0.30 2.13
335493.3 1535267 0.22 5.83
Oilseed cake 635413.3 2963408 0.21 19.97 509883.3 1093983 0.47 8.86
Eggs 3687.67 n.a. n.a. 0.12 40598.33 n.a. n.a. 0.71
Milk dry 4572.67 3345 1.37 0.14 21882.33 13566.67 1.61 0.38
Grapes 10678 14503.67 0.74 0.34 19323.33 22203 0.87 0.34
Pepper 54257 35632.33 1.52 1.71 34970.33 18673.33 1.87 0.61
Share of these commodities in total value of agricultural
exports (percentage)
63.97 61.76
Sources: Computed on the basis of data available in FAO Trade Yearbook (relevant issues) (FAO 2003b).
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South Asian Survey, 18, 1 (2011): 27–62
54 Ramphul
Saudi Arabia, Kuwait, United Arab Emirates (UAE) and the United Kingdom. It
also indicates that during the post-WTO phase, the share of developed countries
in India’s total farm exports has declined considerably. In sharp contrast to
exports, in case of imports of food and allied products, the share of developed
countries has increased.
Comparative Advantage in Farm Trade
An examination of revealed comparative advantage (RCA) by using the Balassa
(1965) index (Equation 7) depicts India as having advantage in a wide variety of
agricultural product groups—rice, tea, coffee, pepper, pimento, tobacco, onion,
egg liquid, egg in shell, sugar, wheat and selected oilseeds like groundnut, sesame
seeds, castor oil, castor bean and oil seed cake—with the value of EPR greater
than unity, as shown in Table 15. It indicates the presence of higher potential for
India to benefit under a more liberal trade environment. Table 16 shows that
Bangladesh is found to have RCA in limited agricultural products, namely tea and
jute, which limit its potential for trade expansion. Table 17 exhibits that Pakistan
has RCA in rice, dates, onion, wheat, sesame seed and orange, while Sri Lanka’s
RCA is mainly concentrated in tea, pepper, copra, coconut, tobacco and natural
rubber (Table 18).
Main Findings and Policy Implications
The article has analysed the pattern and trends in SAC farm trade during the
pre- and post-WTO phases by using both the exponential and nominal export
growth models. It finds that among the SAC, only India and Sri Lanka are agri-
cultural net exporters. Sri Lanka has improved its farm trade performance in the
new trade order. The AoA has generally failed to boost the value of world farm
trade. More specifically, the AoA has not brought genuine benefits for the SAC,
who are, all in all, net losers in the new trade regime. Pakistan and Sri Lanka are
more open to farm trade, while India is the least open among the SAC. Under
the WTO regime, openness of Indian, Sri Lankan and Bangladeshi agriculture
has increased. In sharp contrast, Pakistan’s agricultural economy has been grad-
ually closed up. Compared to India, Bangladesh, Sri Lanka and Pakistan have
faced larger constraints on maintaining or expanding agricultural exports with
the expansion of global farm trade. This can be attributed to higher concentra-
tion of agricultural exports in a small number of products in these countries and
faster growth of non-agricultural exports. FAO (2007) finds that sudden and
sharp increase in imports in developing countries leads to (i) downward pressure
on local prices, (ii) increase in share of imports in the domestic market, (iii)
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Table 15. Revealed Comparative Advantage of India’s Chief Farm Products
Item 1993–94 1994–95 1995–96 1996–97 1997–98 1998–99 1999–2000 2000–01 2001–02 2002–03 2003–04
Milk dry 0.07 0.26 0.12 0.04 0.03 0.04 0.16 0.34 0.69 0.37 0.22
Butter 0.06 0.11 0.08 0.02 0.02 0.12 0.22 0.28 0.27 0.24 0.22
Egg in shell 0.52 0.34 0.55 1.69 1.74 1.71 1.44 1.77 2.14 1.63 3.00
Egg liquid 0.02 0.00 0.84 7.81 5.73 2.59 2.41 4.84 8.54 8.79 7.43
Wheat 0.01 0.15 1.70 2.42 0.00 0.02 0.00 0.89 2.87 2.98 4.35
Rice 13.53 10.10 29.92 18.96 21.87 25.45 14.12 14.29 13.94 21.47 16.55
Potato 0.10 0.39 0.41 0.49 0.65 0.13 0.35 0.32 0.10 0.21 0.47
Tomato 0.00 0.01 0.01 0.01 0.01 0.00 0.00 0.00 0.02 0.09 0.05
Onion 13.15 9.75 9.19 12.67 4.26 5.90 7.39 10.31 10.88 8.52 14.73
Lemon 0.36 0.52 0.89 0.96 0.92 0.56 1.08 1.18 1.32 0.95 1.52
Banana 0.02 0.01
0.02 0.00 0.00 0.13 0.10 0.13 0.11 0.07 0.07
Apples 0.17 0.14 0.16 0.19 0.20 0.15 0.12 0.06 0.17 0.14 0.11
Grapes 1.10 1.11 0.00 0.00 0.00 0.66 0.85 0.99 0.74 1.00 0.93
Pineapples 0.03 0.02 0.05 0.01 0.00 0.02 0.03 0.10 0.10 0.06 0.07
Raw sugar 0.77 0.13 1.04 2.38 0.00 0.08 0.08 1.70 2.54 1.14 1.93
Refined sugar 1.19 0.40 1.93 3.75 1.56 0.02 0.03 1.12 7.44 6.82 4.33
Natural honey 0.17 0.26 0.74 0.30 0.30 0.62 0.79 0.58 1.26 1.88 2.02
Coffee 3.60 3.91 4.34 4.41 4.42 3.99 3.61 2.54 3.13 2.68 2.87
Chocolate 0.01 0.03 0.03 0.04 0.03 0.05 0.07 0.04 0.52 0.51 0.38
Tea 24.09 24.12 24.74 18.37 24.55 24.97 22.52 21.00 17.94 15.61 16.91
Pepper 33.89 26.68 16.02 32.73 22.71 23.29 22.04 9.80 11.02 8.01 6.63
(Table 15 continued)
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Item 1993–94 1994–95 1995–96 1996–97 1997–98 1998–99 1999–2000 2000–01 2001–02 2002–03 2003–04
Pimento 16.57 13.09 31.94 25.65 18.25 19.06 27.10 19.80 19.23 18.89 19.97
Oil seed cake 16.54 12.80 10.43 16.34 9.66 9.25 8.29 8.05 7.55 3.92 8.39
Tobacco 1.27 0.61 0.96 1.33 0.61 1.20 1.63 1.22 1.20 1.24 1.43
Groundnut 11.69 5.41 10.71 14.89 2.22 6.46 16.75 11.34 9.87 5.62 17.09
Sesame seed 10.51 18.31 22.87 19.29 12.80 25.69 27.39 33.95 37.97 23.68 36.75
Castor bean 31.04 37.15 106.50 141.07 103.38 123.41 119.59 126.26 117.34 61.77 29.79
Cotton lint 0.94 0.07 0.77 65.55 5.34 0.79 0.30 0.27 0.12 0.20 2.65
Castor oil 118.16 120.94 131.53 139.05 119.94 127.99 132.97 116.24 108.71 91.24 96.97
Natural rubber 0.15 0.08 0.09 0.11 0.15 0.03 0.05 0.12 0.15 0.82 1.17
Pears 0.01 0.01 0.01 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Sources: Computed on the basis of data available in FAO Trade Yearbook (relevant issues) (FAO 2003b).
(Table 15 continued)
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Table 16. Revealed Comparative Advantage of Bangladesh’s Chief Farm Products
Item 1993–94 1994–95 1995–96 1996–97 1997–98 1998–99 1999–2000 2000–01 2001–02 2002–03 2003–04
Jute 1309.1 1348.1 1209.7 1241 1081.2 930 976.6 1016.6 256.8 403.34 368.1
Tea 29.06 29.34 22.01 16.63 13.54 14.57 15.77 6.60 2.24 2.28 4.10
Tobacco 0.14 0.07 0.06 0.09 0.08 0.25 0.16 0.17 0.12 0.19 0.51
Sources: Computed on the basis of data available in FAO Trade Yearbook (relevant issues) (FAO 2003b).
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Table 17. Revealed Comparative Advantage of Pakistan’s Chief Farm Products
Item 1993–94 1994–95 1995–96 1996–97 1997–98 1998–99 1999–2000 2000–01 2001–02 2002–03 2003–04
Dates 31.17 50.88 31.42 31.55 58.31 63.56 65.59 104.2 60.84 66.85 58.81
Rice 33.86 24.26 40.62 43.46 46.78 38.67 53.53 58.35 49.26 44.06 49.68
Cotton lint 22.41 5.88 4.12 33.03 2.22 4.07 0.33 15.69 5.49 2.69 3.86
Onion 0.11 2.26 0.38 0.93 1.51 7.01 19.3 8.91 6.86 3.45 2.82
Orange 0.76 0.84 0.86 0.96 2.63 1.42 2.41 3.11 3.54 3.89 3.11
Pimento 11.83 9.38 2.51 0 2.71 3.86 3.45 6.23 4.15 2.89 4.85
Tobacco 0.19 0.13 0.18 0.07 0.06 0.16 0.17 0.19 0.27 0.15 0.18
Sesame seed 7.13 17.63 19.38 15.8 9.95 7.21 9.68 7.14 30.01 34.04 7.42
Potato 0.16 0.11 0.15 0.03 0.01 5.04 7.27 4.92 2.79 2.51 2.34
Natural honey 0.34 0.25 0.51 0.91 1.75 2.08 2.66 3.04 1.08 0.83 1.1
Chocolate 0.18 0.2
0.15 0.13 0.12 0.1 0.09 0.07 0.08 0.1 0.12
Bran and milling products 4.77 0.85 0.71 1 3.12 0.3 0.33 0.33 2.63 2.29 2.22
Wool degrease 2.55 2.51 4.02 5.02 5.79 2.56 2.46 0.65 0.7 0.71 0.87
Sugar 0 2.54 6.26 0.53 0 26.99 26.81 0.65 0.07 0.18 0.63
Wheat 0 0.03 0 0.02 0 0.06 0.07 0.34 3.31 4.96 6.45
Sources: Computed on the basis of data available in FAO Trade Yearbook (relevant issues) (FAO 2003b).
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Table 18. Revealed Comparative Advantage of Sri Lanka’s Chief Farm Products
Item 1993–94 1994–95 1995–96 1996–97 1997–98 1998–99 1999–2000 2000–01 2001–02 2002–03 2003–04
Pepper 23.42 10.17 13.02 14.38 18.21 29.43 19.76 23.97 14.51 39.01 27.45
Coconut 151.08 84.47 136.78 108.96 163.17 87.23 107.34 127.93 120.27 124.53 185.23
Coconut dessic. 122.24 170.12 150.87 233.43 286.57 421.67 212.39 364.70 232.65 175.97 129.37
Copra 50.16 36.65 69.66 87.76 51.77 72.41 110.82 87.20 203.67 330.80 371.44
Tea 146.65 136.02 215.77 287.06 286.08 257.94 270.81 277.99 305.45 354.69 386.09
Tobacco 1.62 1.28 2.25 2.06 1.87 2.01 2.15 2.06 2.33 2.66 1.56
Natural rubber 15.62 10.51 14.29 17.94 19.07 12.28 12.00 8.63 9.28 8.45 7.67
Pineapple 1.75 1.49 1.83 1.84 2.78 0.00 0.00 0.00 4.81 3.61 1.77
Rice 0.11 1.46 2.10 0.13 0.17 0.17 0.14 0.21 0.18 0.24 0.23
Bran and milling
products
32.73 38.12 37.94 0.00 0.00 0.02 0.00 0.01 23.40 45.09 50.04
So u r c e S : Computed on the basis of data available in FAO Trade Yearbook (relevant issues) (FAO 2003b).
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South Asian Survey, 18, 1 (2011): 27–62
60 Ramphul
reduction in level of sales, production, productivity, capacity utilisation and
profits, (iv) increase in losses and (v) rising unemployment. The findings of this
study suggest that the SAC need to designate an adequate number of farm prod-
ucts as special products and require an effective and proactive special safeguard
mechanism to avoid the potential disruptive effects of indiscriminate farm
import surges.
Acknowledgements
The author gratefully acknowledges the helpful comments and suggestions received from
Professor T.R. Kundu, Department of Economics, Kurukshetra University, Kurukshetra,
and Professor R.P. Hooda, Vice-Chancellor, Maharshi Dayanand University, Rohtak.
Thanks are also due to an anonymous referee of South Asian Survey for careful reading
of an earlier draft of the article and for valuable comments and constructive suggestions
which have substantially improved the quality of the work. Any remaining errors are, of
course, the author’s responsibility.
Notes
1. In this article, SAC comprises the four countries in the South Asian region which are
founder members of WTO and agricultural producers: (i) India, (ii) Bangladesh, (iii) Sri
Lanka and (iv) Pakistan.
2. It may be noted that f
1
measures the growth in exports due to a general expansion (or
contraction) of world market for country’s agricultural exports, f
2
measures the growth
in exports through an increase (or decrease) in market share for its agricultural exports
and f
3
captures the growth in export due to diversification into non-agricultural exports
(GATT 1966: 23–32; World Bank 1997: 259).
3. See dell’Aquila et al. (2007) for a detailed discussion on advantage of specialisation in
trade measure.
4. See Sharma and Dietrich (2007) for a detailed discussion on some measures of
comparative advantage.
5. Bangladesh’s farm exports are mainly concentrated in jute, which was not covered by
the AoA.
6. The CAGR of world total agricultural exports has slackened from 6.6 per cent during
1985–94 to 1.7 per cent during 1995–05.
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