Sunil Jain: Why Doha's important

PERSPECTIVES

There have been several studies on the impact of reduction/withdrawal of OECD subsidies on farm projects "" one said cotton prices would rise 26 per cent if the US withdrew its subsidies, another said welfare gains from a 40 per cent tariff reduction would be $70 bn a year. ICRIER has tried to quantify both the price and supply impact of WTO-induced changes, at both the global level as well as in India. It finds that the impact on India's wheat and rice production is quite small "" one reason, says ICRIER's Surabhi Mittal is that, due to food security concerns, the prices of these crops are determined more by administered mechanisms than by the market. Moreover, farmers, especially small farmers, produce mainly for themselves and the proportion of the crop sold is in any case very small. In the case of sugarcane and cotton, however, the welfare gains to be made are significant. 
 

Welfare gains (Impact of change in OECD policy on poor farmers in India, in per cent)
	Through eliminating subsidies	Through tariff reduction	Through full liberalisation
Rice	0.24	0.41	0.50
Wheat	1.48	0.68	3.66
Cotton	16.23	5.14	4.15
Sugarcane	30.75	12.05	18.46
Source: OECD Agricultural Trade Reforms: Impact on India's prices and producers' welfare, Surabhi Mittal, July 2007, ICRIER