The Ministerial Meeting/Conference of WTO in Hong Kong was the 6th meeting of WTO (its member countries and observers) held during December 13th -18th, 2005. The Ministerial Conference is the apex decision-making body of the WTO, which meets at least every two years. It brings together all member countries (or customs unions) of the WTO, presently 150 in number. The Ministerial Conference has the power to make decisions on any matter under any of the multilateral trade agreements.
Source: WikipediaII. The WTO: The World Trade Organization, HQ at Geneva, Switzerland was established in 1995. It is the precipitation of the intents of the Bretton Woods Conference (1944) that originally proposed to create an international trade organization that would frame and implement the rules and regulations for trade between different countries, facilitating an uninterrupted functioning of a free market economy at the global level. Initially, it was disfavoured by the USA, fearing that such an organization might be used to regulate, rather than liberate, the big business. However, the General Agreement on Tariffs and Trade (GATT), created with 23 members by the Bretton Woods Conference that came to force in 1948, survived. Since its inception, the GATT had a sequel of agreements (called rounds) from time to time. By 1993 its membership was 123, when in its Uruguay round, it concluded to establish a regime of reduced tariffs and export subsidies, reduced other import limits and quotas over the next 20 years, agreement to enforce patents, trademarks and copyrights (TRIPS), extended international trade law to the service sector (GATS) and opening up foreign investment. Thus, WTO was established in 1995 as a replacement of the GATT.
The objectives of WTO are, thus, to increase international trade by reducing trade barriers and providing a platform for the negotiation of trade and to resolve disputes, if any, between member countries. The acclaimed goal is to help producers of goods and services, exporters, and importers conduct their business in a fair environment, mostly based on efficiency and economic principles rather than political restrictions or state support. The general principles of functioning of WTO aim at a discrimination-free trading system in which a member country cannot favour another country or discriminate against foreign products or services. Each member country will enjoy the status of the 'most favoured nation' in the eyes of each other. The member countries would conduct trade with each other with the least possible tariffs and non-tariff barriers, whereby the trading system would be more competitive and predictable. Additionally, the trading system should be more accommodating for less developed countries, giving them more time to adjust, greater flexibility, and more privileges.
III. The Institutional Structure of WTO: As it has been mentioned earlier, the Ministrial Council/Conference is the apex body of the WTO. Under the apex body, there is a General Council that acts on behalf on the Ministerial Council on all of the WTO affairs. It has representatives (ambassadors or equivalent) from all member countries. Collaterally, there are two other bodies, the one to review the trade policy from time to time (the Trade Policy Review Body or TPRB) and The Dispute Settlement Body (DSB). In the third tier are the Council for Trade in Goods, the Council for Trade-Related Aspects of Intellectual Property Rights, and the Council for Trade in Services. At the fourth tier, there are subsidiary bodies under each of the three councils, other committees, e.g. for trade and environment, trade and development (subcommittee on Least-Developed Countries), regional trade agreements, balance of payments restrictions, budget, finance and administration, etc., working parties and working groups. All WTO members may participate in all councils, committees, etc., except Appellate Body, Dispute Settlement panels, and plurilateral committees.
IV. The Ministerial Conferences of the WTO: Up to December 2005, the WTO have had six ministerial conferences. The first ministerial conference was held at Singapore in 1996. Discussions at this conference raised many issues, especially due to disagreements between developed and developing countries. The four major issues initiated by this conference, often referred to as the Singapore issues, relate to four working groups set up by the conference on (i) investment protection, (ii) competition policy, (iii) transperency in government procurement, and (iv) trade facilitation. The second conference (1998) is not of any special significance, but the third conference (1999) at Seattle, USA ended with demonstrations and riots only and was a failure.
The fourth conference (2001) was held at Doha in Qatar. The issues of development and the interests of poorer member countries were under the main focus. Liberalisation of agricultural markets in rich countries, opening up non-agricultural market access (NAMA) mainly for industrial goods in developing countries, services sector liberalisation under the GATS agreements, and further working with the 'Singapore issues' of investment, competition policy and public procurement were the main resolutions of the conference. Thus, the Doha Development Agenda was launched.
The fifth ministerial conference was held in Cancún, Mexico in 2003. An alliance of 22 developing countries, the G20 (led by India, China and Brazil), resisted demands from the developed nations for agreements on the 'Singapore issues' and demanded an end to agricultural subsidies within the European Union and the US.
The sixth ministerial conference was held in Hong Kong in December 2005. It discussed the Doha Development Agenda at large. In this conference, the member countries agreed to phase out all their agricultural export subsidies by the end of 2013, and terminate any cotton export subsidies by the end of 2006. Certain concessions were agreed to be given to the developing countries, mainly relating to duty free, tariff free access for goods from the Least Developed Countries. Other major issues have to be resolved by the end of 2006.
V. The WTO and Trade in Agricultural Products: Agriculture is the mainstay of developing countries. Therefore, the interests of these countries depend greatly on how international trade in agricultural products is dealt with by the World Trade Organization. It may also be noted that developed nations carry out farming on a very organized and commercial basis. They also enjoy the scale economies in farming. Additionally, they subsidize agriculture heavily. On the other hand, agriculture in developing countries is on small farms, mostly with traditional technologies and poor inputs. In view of this, the agriculture in developing countries is at odds in the international market.
The Agreement on Agriculture (AoA) of the WTO, in force since January 1995, has three main planks; (i) domestic support, (ii) market access, and (iii) export subsidies.
In matters of the domestic support, the agreement visualises three types or boxes: a Green Box, an Amber Box and a Blue Box. The Green Box contains fixed payments to producers for environmental programs. However, these payments must not be related to the current production levels. This is 'decoupling' the current level of production and the subsidies given for environmental protection. The Amber Box contains domestic subsidies that the government has agreed to reduce (but not to eliminate). The Blue Box contains subsidies which can be increased without limit, so long as payments are linked to production-limiting programs. It has been observed that the Europe and America heavily subsidize farming, especially to large agricultural concerns and agri-business. Its result is that the global markets are flooded with their products, depressing the prices, at which developing countries cannot compete the developed countries. According to the World Bank, more than half of Eeropean Union support goes to 1% of producers while in the US 70% of subsidies go to 10% of producers, mainly agri-businesses. However, these countries argue that the support is needed for the protection of the small farmers.
The market access is the second plank, stressing on the reduction of tariff and non-tariff barriers to trade by WTO member-states. The member countries were classified into three categories: the developed, the developing and the least developed. The agreement required 36% average reduction, with a minimum per tariff line reduction of 15% over five years by the developed countries, while these figures were 24% and 10% for developing countries. The time span stipulated for the developing countries was nine years. Least Developed Countries (LDCs) were exempted from tariff reductions, but either had to convert non-tariff barriers to tariffs, or "bind" their tariffs, creating a "ceiling" which could not be increased in future.
Export subsidies make the third plank of the agreement. It was required that the developing countries would reduce export subsidies by at least 35% (by value) or by at least 21% (by volume) over the five years to 2000.
Negotiations on agriculture began in early 2000, under Article 20 of the WTO Agriculture Agreement. By November 2001 and the Doha Ministerial Conference, 121 governments had submitted a large number of negotiating proposals.
These negotiations continued. The Doha Declaration also included a series of deadlines. The declaration built on the work already undertaken, confirmed and elaborated the objectives, and set a timetable. Agriculture was considered a part of the single undertaking in which virtually all the linked negotiations were to end by 1 January 2005.
The Doha declaration reconfirmed the long-term objective already agreed in the present WTO Agreement: to establish a fair and market-oriented trading system through a programme of fundamental reform. The programme encompassed strengthened rules, and specific commitments on government support and protection for agriculture. The purpose was to correct and prevent restrictions and distortions in world agricultural markets. The member governments committed themselves to comprehensive negotiations aimed at all the tenets of AoA.
The declaration made special and differential treatment for developing countries integral throughout the negotiations, both in countries' new commitments and in any relevant new or revised rules and disciplines. It held that the outcome should be effective in practice and should enable developing countries meet their needs, in particular in food security and rural development. The participant members also took note of the non-trade concerns (such as environmental protection, food security, rural development, etc) reflected in the negotiating proposals already submitted. They confirmed that the negotiations would take these into account, as provided for in the Agriculture Agreement.
VI. The Hong Kong Conference and its Aftermath: How was the 6th ministerial conference of WTO in Hong Kong ? "It was worth it. We have managed to put the (Doha) Round back on track after a period of hibernation …There has been a re-balancing in favour of developing countries, whose interests have now been placed at the heart of our negotiations as we provided for in 2001 when we launched this Round." This is how Pascal Lamy, Director-General of WTO, looks at the outcome of the conference.
However, that may not be the true picture. What was discussed and concluded in the conference is much in the dark. Martin Khor (2005) noted : "The Director-General Pascal Lamy was later to brief journalists that over the week, 450 meetings were organized, six major gatherings and over 200 consultations by facilitators. Some were heads of delegation meetings, others consultations and plenary sessions on the various issues, yet others were 'Green Room' exclusive meetings to which a select few were invited. Yet, there will be no records or minutes of these meetings or of the negotiations. Who said what, indeed which countries were invited or were present, will not be known or at least will not be made public. For all intents and purposes these were 'non meetings.' The WTO spokesman referred to the Green Room meetings in terms of: 'If the Green Room does exist, and if there was a meeting.....' Khor further notes "On agriculture, almost all speakers (from developing and developed countries) stressed the need for an end-date for export subsidies, many said this should be 2010."
As the Global Policy Forum puts it : This meeting could have been the final step of the Doha trade talks launched in 2001. Also known as the "Development Round," the Doha negotiations are supposed to favor trade interests of poor countries, contributing to a more equal global trade system. On the last day in Hong Kong, the WTO member countries, some pressured strongly by foreign economic and political interests, presented a common Ministerial Declaration. Poor countries conceded to rich countries' interests in freeing trade in industrial goods and services in exchange for some concessions on export subsidies for agricultural goods. The European Union promised to eliminate export subsidies by 2013. Nevertheless, this form of subsidy accounts for as little as 3.5% of EU's overall agricultural support. Thus, it will not significantly improve poor countries' export opportunities to the European markets. While the "failure" of Cancun had leveled the WTO playing field, temporarily ending the "duopoly" of the US and the EU, the wins and losses for poor countries in Hong Kong are less clear. During the ongoing WTO negotiations in 2006, poor countries and NGOs must keep up the pressure on the governments of rich countries to ensure trade that favors real development.
As the trade negotiations following the WTO conference in Hong Kong intensify, rich countries discuss many of the remaining issues in small and exclusive conferences. Focus on the Global South warns that these arrangements further undermine poor countries' ability to benefit from the Doha trade round. Kwa (2006) also looks at the progress made to liberalize agricultural, non-agricultural and service markets.
Rich countries once again prevented the World Trade Organization (WTO) from turning into a real development tool. They refused to make multilateral concessions like cutting tariffs on agricultural and industrial goods coming from poor countries. According to Stiglitz (2006), the Hong Kong summit did not generate a deal, but only an agreement about the way forward. As long as the US and EU take advantage of their power in bilateral trade talks and refuse to support development-friendly trade, the Doha round is unlikely to succeed.
Sharma (2006) observes : "Ten years after the WTO came into existence, and after six ministerial conferences, developing countries have failed miserably to force the rich industrialised countries to remove even one dollar from the massive agricultural support they provide to agribusiness corporations in the name of farmers. Unable to make any dent in the citadel of unfair trade -- farm subsidy of U.S. $1 billion a day -- developing countries have time and again taken refuge behind an illusionary smoke screen. After each of the ministerial conferences, they have returned 'victorious', and the price has been paid by millions of small farmers edged out of farming. … In turn, developing countries have agreed to a high level of ambition for market access in agriculture and non-agriculture goods … the developing countries gave in. Step by step, developed countries have been able to get more market access from the developing countries, without showing an equal reciprocation".
Mukhopadhyay and Bose (2006) observe that the WTO Ministerial Conference at Hong Kong eventually succeeded in adopting a Declaration. The developed countries failed to push their agenda at Cancun due to the united resistance put up by the developing countries. At Hong Kong, however, the developed countries not only succeeded in keeping the negotiations on track, but also managed to divide the developing countries and extract substantial concessions from them against a post-dated cheque of eliminating agricultural export subsidies by 2013.
When asked, India's Commerce Minister Kamal Nath replied: "The U.S. has already offered to reduce domestic support by 53 per cent while the EU offer is for 70 per cent." This was actually a commitment that the U.S. and EU had made in mid-October. Interestingly, the minister had then lashed out: "What the U.S. proposed last month is not real cuts in agriculture subsidies. The real cuts would be when there is decline in the support provided by the U.S. treasury," he asserted. But post-Hong Kong, for some strange reasons the minister agreed to the same commitment! (Sharma, 2006).
"Unless agricultural subsidies are removed there is no way developing countries can escape the harmful impacts of cheaper and subsidised food surges. Highly subsidized imports from the developed countries have already done irreparable damage to the agricultural production potential of the developing countries. Between 1995 and 2004, Europe alone has been able to increase its agricultural exports by 26 per cent, much of it because of the massive domestic subsidies it provides. Each percentage increase in exports brings in a financial gain of U.S. $ 3 billion.
On the other hand, a vast majority of the developing countries, whether in Latin America, Africa or Asia have in the first 10 years of WTO have turned into food importers. Millions of farmers have lost their livelihoods as a result of cheaper imports. If the WTO has its ways, and the developing countries fail to understand the prevailing politics that drives the agriculture trade agenda, the world will soon have two kinds of agriculture systems -- the rich countries will produce staple foods for the world's 6 billion plus people, and developing countries will grow cash crops like tomato, cut flowers, peas, sunflower, strawberries and vegetables.
In reality, WTO would ensure that the reins of food security are passed into the hands of rich and developed countries -- back to the days of 'ship-to-mouth' existence. Developing countries have no one to blame, but themselves." (Sharma, 2001)
As Gresser (2006) has observed : Without WTO agreement on reforms before April 30th, the hopes of fair trade for developing nations could be postponed indefinitely. The world's poor, of course, would see hopes for fairer trade put off for many years. Richer countries, deprived of a chance to find new markets, could easily start quarreling over the old ones. In the 20th century, governments chose to move toward broadly shared prosperity, creating an economic foundation for stable relations among fractious powers. Will they still do so in the 21st?
VII. And Before Matters are Concluded: As the 30th April is drawing nearer, every member country of WTO is preparing for it. Negotiations are going on and the developed countries are as busy at negotiations as the developing and the Least Developed ones.
One piece of good news for developing countries is that an agreement was reached at the Conference that they would be able to designate a number of agricultural goods as being products of special importance on the grounds of food security or rural development. These products will be subject to less stringent rules regarding liberalization. There will also be a special safeguard mechanism, which would allow developing countries to take further action to protect these specific sectors in circumstances such as a dramatic fall in prices. However, it is yet to be agreed how such a mechanism will work in practice (Suzannei, 2006).
In the conference, some discussions were also made on the patents and the property rights. As reported, the Indian Commerce Minister Kamal Nath called for negotiations on the relationship between the TRIPS Agreement and the Convention on Biological Diversity to be launched in Hong Kong. Referring to growing popular discontent in developing countries about biopiracy and the misappropriation of traditional knowledge for commercial gain, Mr Nath said India intended to raise the matter in Green Room discussions. India has long supported requiring patent-seekers to disclose the source and country of origin of any genetic resources and traditional knowledge used in the development of an invention. Sources report that India has developed draft language for the ministerial declaration based on its October proposal calling for negotiations on mandatory disclosure requirements, as well as prior informed consent and benefit-sharing (ICTSD, 2005).
VIII. Agriculture in Meghalaya*: Meghalaya's economy is basically agricultural with about 80% of its total population (17.8 lakh) depending entirely on Agriculture for their livelihood. It has an area of 22429 sq kms. Of the total area about 10% only is used for cultivation. Rice is the main crop. The important crops of the state are potato and maize. It also grows some important cash crops such as rubber, coffee, jute, ginger, mustard, sugarcane, chillies, etc. These crops are produced in substantial quantities and are being marketed in adjoining states. Meghalaya is important for cultivation of fruits like pineapples, oranges, bananas, etc. Apart from the above the State have achieved signal success in the cultivation of non-traditional crops like Tea, Cashewnut, Oilseeds, Tomato, Mushroom, Wheat, etc. Only about 18% of the cultivated land is irrigated.
The total cropped area in the State has almost doubled in the last 30 years. Food grain production sector covers about the 2/3rd area under cultivation. About 45 percent of the total area under paddy, wheat and maize use high-yielding variety seeds. The productivity has increased tremendously with the introduction of HYV seeds - from 1200 kgs/ha to 2300 kgs/ha in case of (HYV) rice, from 534 kgs/ha to 1218 kgs/ha of Maize and from 611 kgs/ha to 1508 kgs/ha of Wheat during the 1971- 2000 period.
Cereals: Rice, wheat, and maize are the most important cereals cultivated in the state. Of these, rice alone accounts for about 78 percent of the total area under food grains. It is grown throughout the state. Among the popular varieties of rice are IR-8, Jaya, Pusa-2-21, Mahsuri, Pankaj, etc. Farmers are given these seeds at 50% subsidised rates. Two other High Yielding varieties of rice, NEH Megha-I and NEH Megha-2, developed by the ICAR, North-East Region at Umroi near Shillong, were released in 1991-92. These varieties, extensively cultivated in the state, are cold tolerant and suitable for the higher altitude regions. Another variety of rice in the improved varieties series is IR-36, which is suitable for Rabi season, fits well into the multi-cropping system and has been widely cultivated all over the feasible areas of the State. Cultivation of these varieties has led to a major break through in the productivity (and production) of rice in the state. The total area under rice is about 160 thousand hectares. Maize is another important food grain of the State, cultivated on a little over 17 thousand hectares. Composite varieties like Vijay and Kisan are appropriate medium and low altitude regions while the local improved varieties such as Local White and Local Yellow are cultivated in higher altitude regions.
The area under wheat is about 4.5 thousand hectares. The Sonalika variety of wheat is becoming popular to farmers in the plain areas of Garo Hills Districts.
Millet is a minor crop in the state cultivated on an area of 2.8 thousand hectares. It has shown a declining trend in the area under cultivation.
Pulses: Pulses are still insignificant in the State, cultivated on 3.3 thousand hectares. Gram, tur and lentil are the main pulses. The crop is grown mainly in the plains of the Garo Hills Districts. More stress is being given to popularise the cultivation of various pulses in the State.
Commercial Crops: Important commercial crops cultivated in the state are potato, sugarcane, sweet potato, tapioca and tobacco.
Potato is the major cash crop of the State, grown on 25 thousand hectares. It is cultivated extensively in the high altitude regions of the Central Plateau covering the East and West Khasi Hills Districts. The different varieties of potato that are cultivated in Meghalaya are Great Scot, Up-to-date and Royal Kidney. The introduction of the high yielding and blight resistant varieties, "Kufri Jyoti" and "Kufri Megha", and improved methods of cultivation has substantially increased the production of potato.
Oilseeds:The area under oilseeds is a little over 9 thousand hectares. Rape and mustard are the main oilseed crops grown in the State cultivated on some 7 thousand hectares. Groundnuts, soyabean and sesamum are other oilseed crops. Arecanut and betelvine are grown in the low altitude region, especially in the southern slopes of the border areas. Considerable quantities of these products are exported outside the State. Quality planting materials and plant protection chemicals at 50% subsidy and grant-in-aid for the construction of arecanut soakage tank are provided to arecanut growers.
Fibre crops: Cotton is grown in East, West and South Garo Hills District. Besides cotton, jute and mesta are the important fibre crops grown in the State.
Spices: The most prominent spices of the state are turmeric, ginger, chillies, black pepper and bay leaf. Ginger is grown in almost all parts of the State. The cultivation of this crop is fast expanding. Turmeric is a grown commercial crop in the State and the "Lakadong" variety produced in the district of Jaintia Hills is of a very good quality. Black pepper is mostly grown in the border areas of the State. High yielding variety like Panniyur-I has been successfully introduced and multiplied.
Fruits: Meghalaya is blessed with tropical, semi-tropical and temperate climates. The variation of altitude, soil and climatic conditions provide ample scope for the cultivation of a wide variety of horticultural crops. The important horticultural crops currently being grown in the state are banana, oranges, pineapple, papaya, jack-fruit, litchi, plum, peach, and pear. Of all the horticultural crops grown in the state, the three most important are Pineapple, Citrus (Mandarin Orange) and Banana. To accelerate horticultural development in the State, a Package Scheme for Credit-cum-Subsidy Assistance has been introduced. The Scheme envisages cultivation of specific horticultural crops like orange, pineapple, naspati, stone fruits, etc. in specific areas for which financial assistance comprising of 80% Credit component and 20% Subsidy is provided. Quality planting materials of major horticultural crops such as citrus, pineapple, banana, stone fruits, etc. are provided to farmers at 50% subsidy. Steps have also been taken for development of Horticultural Orchards in selected compact areas and rejuvenation of the existing Citrus Orchards including introduction of more crops suitable for the various agro-climatic conditions of the State. Existing nurseries in the State have been strengthened to meet the increasing demand of the quality planting materials. These measures are expected to boost the total horticultural production.
Vegetables: The agro-climatic conditions in Meghalaya favours the cultivation of vegetables throughout the year. The area, production and productivity in the vegetable sector has been showing an upward trend. Vegetables like Cabbage, Cauliflower, Radish and Squash are regularly marketed outside the state. In fact, revenue returns from vegetables in Meghalaya tends to be higher than that from cereals. The other important vegetables of the State are beans, carrots, peas and tomatoes. The Agriculture Department is taking steps to accelerate the growth of the vegetable sector by encouraging farmers to grow vegetables in poly-houses and providing them subsidy on the cost of such houses. Vegetable production in poly-houses is expected to double the productivity. Steps are being taken to extend vegetable cultivation in and around administrative headquarters to meet the increasing demand for vegetables in these centres. Quality seeds /seedlings, plant protection chemicals and garden tools are distributed at 50% subsidy to farmers.
Rubber and Coffee: In addition to the cash crops mentioned above, Meghalaya produces rubber and coffee as well. In 1997-98, the area under rubber was only 29 hectares and production was 4842 kgs of latex and 898 kgs of scrap. Three farms are producing rubber. In 1999-2000, there were 54 holdings producing coffee. The area under coffee was 759.53 hectares and production was 22515 kgs.
Mushrooms: Meghalaya has a great potential for production of mushrooms. A Regional Centre for Training and Production of Mushrooms in the North Eastern Region, sponsored by the North Eastern Council has been set up at the Agricultural Complex in Upper Shillong, under the overall control of the Directorate of Agriculture, Meghalaya. produce at competitive rates directly, or through various marketing agencies.
The Centre is currently concentrating on the production and extension of two varieties of Mushrooms which have the strongest market potential. They are : Agaricus spp. or White Button Mushroom, and Pleurotus spp. or Dhingri /Oyster Mushroom. Till date, hundreds of farmers have been identified as trained growers of Mushroom in the state. Training sessions are still being held regularly in villages in all the districts of the State. The Mushroom Centre produces quality spawn (seed) for supply to farmers of the State at subsidized rates. It also meets the demand for spawn of the other North-Eastern States. Currently, concentration is being made on the production of Oyster Mushrooms in contrast to Button Mushrooms for the following reasons :-
- Oyster Mushroom is amenable to dehydration, but not button mushroom.
- Dehydration technology is simple and cheap for Oyster Mushroom. Therefore, it is much cheaper than Button Mushroom which on the other hand, can only be canned.
- Canning technology for Button Mushroom is sophisticated and expensive and, therefore, the ultimate retail price is much higher than that of Oyster Mushroom.
- In the International Market, the revealed preference of consumers is in favor of Oyster mushroom.
The Department of Agriculture is currently exploring possibilities of establishing regular marketing channels both in the domestic and International markets.
Orchids Cultivation: The climatic and topographical features of Meghalaya is quite suitable for orchid cultivation Cut flowers of certain types of orchids have a good demand abroad. Its demand can also be sensitised in the country itself. However, much has not been done in Meghalaya in this direction. On the other hand, some other states in the north-eastern region have gone in for a commercial production of orchids.
IX. The WTO and the Case of Meghalaya: It is to be noted that like in many other states of India, Meghalaya's agricultural economy is primarily a subsistence economy. A part of the agricultural products is no doubt sold in the market, but the major part of the produce is directly consumed by those who produce it. The productive activities in agriculture, therefore, is not geared to the market. Consistent with the drive to produce, the economy is labour intensive rather than capital intensive. Irrigation facilities are poor and do not warrant investment in the inputs that raises agricultural production. Farm sizes are very small, mostly too small to give rise to the scale economies. Moreover, unlike in the plains, the rugged terrain of the fields do not permit use of machines. In a dualistic economic structure, the agricultural sector falls in the rural, subsistence-oriented enclave, only poorly connected to the other enclave making the market economy (Mishra, 2004, 2005). It is also expected that the effects of WTO decisions will not readily permeate the rural economy of Meghalay mainly due to weak linkages (Mishra, 2005b). However, alienation of the rural economy from the urban economy will be intensified further, leading to further impoverishment.
As it has been mentioned, an agreement was reached at the Conference that the member countries would be able to designate a number of agricultural goods as being products of special importance on the grounds of food security or rural development. These products will be subject to less stringent rules regarding liberalization. Further, protection may be given to the innovations if patented. These are the planks on which Meghalaya may protect its interests. It has been mentioned that certain varieties of paddy have been developed indigenously. Further, Meghalaya's spices, garlic, turmeric and a few other products have some specialty. These crops qualify not only for rural development and sustenance of the people; they fit into the innovation scheme also. Meghalay has also to look into the possibilities to protecting mushroom varieties, orchid floriculture, sericulture, and the related crops. Certain medicinal plants are very special to the North-East, and Meghalaya in particular. Little has been done to identify, study, cultivate and patent them. A concerted effort is required in this direction.
Especially after globalization the need for promoting economic development in the less developed regions of India has assumed more importance than it was given in the pre-globalization era. The reasons are simple. Now the Indian economy cannot afford to keep natural and human resources in any part of the nation inoptimally utilized or underutilized. The market economy and under-utilization of resources are mutually inconsistent. That was possible (and greatly encouraged) in the pre-globalization period. However, development of a poor region requires not only heavy and well-planed investment, it requires boosting up of enterprise and profitability conditions. At this juncture, the utility of subsidies to fight against adversities faced by the farmers and entrepreneurs is clear.
However, under the obligations of the WTO deal, India must gradually reduce subsidies except in the blue box sphere. As a matter of fact, the beginning of the process of weaning has already been made. This will affect the Nort-Eastern Region adversely. It requires that Meghalaya should argue for selective and discriminatory reduction of subsidies and enhancement of subsidies in certain spheres. It may be noted that subsidies may have different effects in different cases. In certain situations, it may promote complacency, in others it is necessary to development. These areas are to be clearly demarcated for a differential treatment to granting of subsidies. It may be noted that even in the well-developed countries that are the great protagonists of capitalism, individualism and free trade, subsidies are given at a very high rate.
Note and Acknowledgments: The information and the major part of the write up on the agriculture in Meghalaya has been taken from North East India Regional Databank - NEDFi Databank.htm
References
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