The important agenda for most developing countries at WTO are Farm Subsidies. The Trade ministries compare the farm subsidies of various developed countries and negotiatiate for the anti-dumping measures. The agricultural subsidies provided to farmers in most of the developed coutries are extremely high. European agricultural subsidies represent 44% of EU Budget apart from guaranting minimum produce price, imposition of import tariffs and quotas. The USA provides around $16Billion per year subsidies on various Agrucultural programs.
Finance minister has announced a Loan Waiver of Rs. 60,000 Crores, which is approximately equal to $16Billion. It would be interesting to note whether US Agricutural subsidy was considered as a benchmark while announcing the Loan waiver proposition.
This is still a very dangerous proposition because it would provide additional incentive to Indian rural population to stay in farms. The skill level required for agriculture is extremely low and a huge incentive like this will send wrong singals to the rural class.
However, there are certain advantages for such stimulas packages when compared to subsidies as it has been noticed that providing direct subsidies have promoted the farmers to employ unecological ways of increasing production such as indiscriminate use of fertilizers and pesticides with serious enviornmental concequences.
The second advantage of announcing such stimulas package i
