LAHORE: The Pakistan Farmers Alliance (PFA) has expressed disappointment over the failure of authorities to exclude agriculture related produce from the ambit of Most Favoured Nation (MFN) status to India. Both, Federal Minister of Commerce, Makhdoom Amin Fahim, and Secretary Commerce, Munir Qureshi, had assured central leaders of Pakistan Farmers’ Alliance of their support in December 2012 at a meeting that took place in Lahore.
On December 23, 2012, a delegation of the PFA represented by President Farmers’ Associates of Pakistan, Tariq Bucha, the PFA expressed serious reservations about the grant of MFN status to India with respect to the agricultural sector because of India’s heavy protection of its agriculture sector through high tariffs and enormous subsidies, which are unmatched by Pakistan.
The WTO itself distinguishes between agricultural and non-agricultural goods and there is a separate agreement on agriculture. Based on certain provisions of the GATT agreement, Pakistan’s grant of MFN status to India can exclude agricultural goods. Therefore it was agreed that if Pakistan decides to grant India MFN status it would only apply to non-agricultural goods.
After hearing the viewpoint of the agricultural sector, both Fahim and Qureshi made a commitment that Pakistan’s grant of MFN status to India would not apply to agriculture and that any step in this regard would take the views of the farmers under consideration.
Commenting on the outcome of that meeting, President, Basmati Growers Association, Chaudhary Hamid Malhi, President, FAP, Malik Tariq Bucha, President Guava Growers Association, Ibad Khan, Vice President Kissan Board, Sarfaraz Ahmad Khan and President Aiwan-e-Ziraat Punjab, Nasir Cheema, said that, according to well-placed sources, the Ministry of Commerce is ready to renege on its commitment to the agricultural sector due to pressure from other quarters.
During its meeting with the authorities, the PFA had made clear that granting MFN status to India with respect to agriculture would be suicidal for Pakistan’s extensive rural communities. PFA members said that the agricultural sector, which contributes 22 percent of GDP and employs 65 percent of the labour force, had not been consulted before this significant move. This oversight was acknowledged by both, Fahim and Qureshi, who said that their visit was motivated by that very reason.
Bucha said that India grants direct and indirect subsidies of over $60 billion per annum to its farmers. Indian farmers get free water and electricity whereas water and electricity input costs for Pakistani farmers have doubled in the last few years. Furthermore, the Indian farmer purchases a bag of urea for approximately Rs480 but the same bag of urea costs the Pakistani farmer Rs1,700. The Pakistani farmer is therefore at a disadvantage as there is minimal subsidisation of agriculture in Pakistan.
Bucha rejected spurious claims that Pakistan’s agriculture would simply need to become more competitive and efficient to compete. He said that the huge agricultural subsidies given to their farmers by the wealthy countries were the reason that the Doha Round at the WTO had stalled, and Pakistan must not stop protecting its agricultural sector with respect to India.
He also pointed out that Pakistan’s agriculture had some protection from other countries because of transport costs but allowing full-scale trade of agricultural goods through Wagah would mean that Indian suppliers would benefit since Amritsar is much closer to Lahore and the entire GT Road corridor leading to Islamabad than Multan, for example.
Ibad Khan, the head of the Guava Growers Association, said that Pakistani horticulture is already suffering and 80 percent of tunnel farming had collapsed in Punjab because of the unilateral decision made by the Ministry of Commerce to abolish the positive list for the import of Indian goods and move to the negative list. Granting MFN status would mean that Wagah-Attari trade would drastically increase, leaving the Pakistani farmer to compete with heavily subsidised agricultural goods from India.
The PFA representatives said that a hasty decision on granting MFN status to India would compromise Pakistan’s food security. A decision must not be taken in this matter without proper groundwork and planning.
Having heard the views of the farmers, Fahim and Qureshi were moved to exclude agriculture from grant of MFN to India.
Now the PFA has learned from reliable sources that the Ministry of Commerce is poised to renege on its commitment to the agricultural sector. In the event that the Ministry of Commerce does so, the farming community will start protesting at Wagah and other prominent places, said sources.
The PFA has requested President Asif Ali Zardari to immediately intervene and meet with its representatives.
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