Grassroots Reachout & Networking in India on Trade & Economics (GRANITE)

Andhra Pradesh State Level Workshop on
“Opportunities and Challenges in Globalisation of Agriculture and allied sectors in Andhra Pradesh”
Tarnaka District, Hyderabad, June 19, 2006

Consumer Guidance Society (CGS), Vijayawada, in collaboration with Neelam Rajashekara Reddy Research Centre, Kondapur of CR Foundation organised a day-long workshop at Indo American Studies Centre for International Studies IACIS, Osmania University, Hyderabad, on June 16, 2006. More than 70 invitees including members of ‘State Reference Group’, resource persons from the local media, representatives of civil society organisations (CSOs), government departments research institutions, grassroots groups, academicians and CGS staff participated in the meeting.

The panelists included Vaddde Shobhanadreeshwara Rao, former Agriculture Minister, Dr K R Choudary, former faculty Andhra Pradesh (AP) Agricultural University and Professor S Mahendra Dev, Centre for Economics and Social Studies (CESS) and Divakar Babu, CGS.


The objectives of the meeting were to: gain an understanding on globalisation issues, trade and economics in the context of Andhra Pradesh; share and discuss views on issues and challenges in agriculture in the state and gain citizen-consumer perceptions; discuss international, national and state policies relating to these issue; and develop a plan of action to increase awareness on these issues to ensure more people-friendly reforms and policies.


Andhra Pradesh is an agricultural state with predominant dependence of people on agriculture and related activities. The state has major export and import interests and global trade has, and is likely to impact the agriculture, and allied sectors i.e. livestock, poultry, pisiculture, horticulture, sericulture, etc. production, infrastructure, markets, prices and livelihoods. Cost advantages & disadvantages, and competitiveness are the factors of trade not really looked into in AP.

Agriculture in the state is experiencing a deep crisis with farmers’ suicides constituting a cruel testimony. Migration to urban centres in search of employment has increased. Investment in agricultural sector has declined sharply leading to deceleration in output growth and even negative growth. This has resulted in an unprecedented reduction in the per capita availability of food-grains for the rural poor, pushing as large as three quarters of the rural population below “the poverty line”. Even the better off farmers seeking higher returns by raising cash crops of staple food-grains has deteriorated sharply. Further, the unbridled and unregulated market has been playing havoc with the livelihoods of farmers, especially the small and marginal ones.

The rural employment programme and the projected enhancement of agricultural credit offer no solution to the chronic indebtedness of peasants. The inadequacy of the initiative is apparent in the context of the policy environment of withdrawal/ reduction of minimum support price programmes.

Corporate agriculture continues to govern the policy formulation and the “agricultural reforms” have long substituted the theme of “land reforms”. The opening up of the agriculture sector to the corporate capital is the cornerstone of the policy. It is sought to facilitate the corporate ownership by abolishing the ceiling laws and/or contract farming by encouraging dependence of peasants on the corporate sector for both procurement of inputs and marketing of output. Infusion of capital and modern technology, diversification of cropping pattern, value addition through better storage, processing and marketing constitute the professed rationale of this policy. Furthermore, corporate sector is situated in the context of integration with the world markets within the framework of the WTO’s Agreement on Agriculture (AoA) whose paradigm is biased in favour of temperate-zone, capital-intensive, corporate agribusiness-driven, export-oriented, peasant-insensitive and mass–livelihood- threatening agriculture.

Session One

Raghavachari, CR Foundation

The meeting began with an inaugural session chaired by Raghavachari, CR Foundation. In his presidential remarks, Raghavachari said that such a meeting is necessary given the circumstances in which farmers are facing problems of market prices for their produce. He wanted the deliberations to improve understanding on key issues related to trade and economics of the poor farmer.

Diwakar Babu, Consumer Guidance Society

He outlined the objectives of the workshop drawing attention of the participants on the implications of WTO AoA, the current negotiations, consequent policies in India and their implications on agriculture in Andhra Pradesh.

Dr KR Choudhary, Professor (Retd), AP Agricultural University, Hyderabad

He posed a question whether globalisation is inevitable or not saying that it has different types of impacts on different people, sectors, cultures and languages. He felt that the domination of multi-national companies (MNCs) on Indian agriculture is growing which is detrimental to the farmers.

V Shobhanadreeshwara Rao, former Minister for Agriculture, Andhra Pradesh

He pointed out the gross negligence on the part of government towards agriculture, especially in preparedness and improvements and harnessing opportunities and minimising threats emanating from global trade. He said focus on irrigation alone will not help: government needs to ensure the benefit from global agreements, as subsidies given by developed countries to their farmers is a huge problem for the farmers of developing countries.

Professor S Mahendra Dev, CESS, Hyderabad

He said that there is no major threat from WTO on food security in the face of deluge of imports. India does not have to change the food policies like minimum support price (MSP), buffer stock and public distribution system (PDS). The actual tariffs for most of the commodities in India are much lower than the Uruguay Round bound rates. Andhra Pradesh has comparative advantage in maize, green gram, fruits and vegetables, fish, milk and milk products, poultry etc., but competitiveness and standards have to be improved. The viability of AP agriculture depends on public investment, irrigation and water management, diversification and marketing, institutions etc., which will improve competitiveness of agriculture sector in international market. The focus has to be on small and marginal farmers.

Session Two: “Globalisation and Implications for AP Agriculture”

Y V Krishna Rao, former MLA and Presently with CR Foundation/

He called globalisation as entirely a different phenomenon, contrary to impressions in certain quarters, whereby the poor are being suppressed and/or robbed. It is nothing but neo-liberal and imperialistic policy whereby structural adjustment policies are being forced upon the poor. The two reports given by C Narasimham Committee on agricultural credit need to be given proper attention.

Agrarian Crisis in AP: Causes and Concerns, E Revathi, CESS, Hyderabad

Farmers’ suicide is a major cause of concern. One needs to understand the implications of international situation, national policies and local conditions. Farmers are committing suicides not because of social expenditure on education, festive occasions, marriages, consumerism, etc., but because of landholdings that are shrinking in size, for example, 40-50 percent of landholders are small and marginal farmers, and the rising risk and vulnerability and lack of policy support. There are more than 10 sources of loans for farmers in areas prone by suicides. Only 25 percent of agricultural credit at individual level is from institutional sources. Private, village moneylenders have less cushion capacity and hence the repayment process is shorn with pressure and harassment.

Changing Policy Options and Seed market in Andhra Pradesh, P Venkataramana Government Degree College, Hyderabad

He informed that more than 400 seed companies exist in Andhra Pradesh against the requirement of 53 lakh tonnes of seeds in a year. Farmers have changed from self-grown/preserved seeds or public production to private production though rising seed costs is a cause for concern. Lack of regulation over seed industry has led to problems of spurious seeds, which needs to be addressed. Companies announce tall claims, but the yields are low. There is a need for a campaign to protect the consumer interests of farmers.

Treatment of Special Products: Implications of AP Agriculture, Dr K Krantikumar Reddy, Independent Researcher and Organic Farmer

In the state, most of the agricultural products are sensitive, as any flooding of cheap imports would affect the livelihood of farmers. A diverse variety of crops are grown which are sensitive to the local communities for which the sensitive list should be comprehensive. The state is competitive in rice, chilies sugar, dairy products, fruits, and cotton exports of which have been hit by low international prices, a result of the protection afforded by developed countries to their producers. Andhra Pradesh can emerge as a competitive supplier of rice, sugar and dairy products, if distortions in the international market are eliminated.

Session Three: “Issues and Challenges”

J Devi Prasad, WTO Cell, AP, Hyderabad

Presently, AP government has set up a WTO Cell. This Cell is planning to focus on increasing awareness among the farmers on WTO issues.

Globalisation and Agricultural Crisis, Ramanjaneyulu, Centre for Sustainable Agriculture, Hyderabad

Crisis in agriculture is caused by increasing costs of cultivation-decreasing margin, falling prices in the market, decreasing government support/subsidies/credit, market manipulations – seed, fertilisers, pesticides, excessive dependency, spurious inputs, crop failures, perpetual losses, pushing the farmers to terminate their lives.

The problem lies in the models of agricultural development pursued. We went wrong with copied research, education and extension paradigms but we did not copy support systems in terms of subsidies, regulation and accountability. India cannot have labour-saving technologies. The government policies are enabling farmers to move out of agriculture.

The Indo-US Knowledge Initiative does not help the farmers but MNCs. The crisis would be aggravated if proposal such as contract farming/corporate farming, cheaper imports, genetic engineering in food crops, proprietary technologies, public-private partnerships, future trading, FDI in retail sector, external markets and specialised markets etc., are materialised.

Intellectual Property Rights, Dr Kalpana Shastri, National Academy of Agricultural Research Management (NAARM), Hyderabad

The Agreement on Trade-Related Aspects Intellectual Property Rights (TRIPs) along with other international treaties and agreements like Convention on Biological Diversity (CBD), International Treaty on Plant Genetic Resources for Food and Agriculture (ITPGRFA), and Convention on International Trade in Endangered Species of Wild Fauna and Flora (1975) has raised several conscientious issues with critical implications necessitating changes in the system. The foremost question raised often is whether various intellectual property rights (IPRs) mechanisms could provide adequate protection for traditional knowledge, practices and rural based innovations in the agricultural scenario.

Consumer societies should recast their mandates and take measures to meet the challenges related to issues on IPRs protection in agriculture in order to build a sustaining and economically viable agriculture sector in India.

Geographical Indications Dr S K Soam, Senior Scientist, NAARM

Geographical Indications is a better tool to protect the interests of Indian farmers and their products.

Session Four: “Political party perspectives”

Prasad Rao, Rythu Sangham, Andhra Pradesh

Concerted action programme should be taken to implement the recommendations of the National Commission of Farmers, since they are not contradicting the WTO provisions.

Chandra Reddy, CPI (M)

It is good to understand the positions of political parties on WTO issues. Agriculture in Andhra Pradesh is in crisis. Loans in institutional sector are being used as book adjustments. Benefits of insurance are not reaching the farmers for different reasons. While there are water scarcities in many areas, irrigation development is marked by regional imbalances. For better agricultural prices, government procurement is required, which would also ask PDS to enable food security for the poor. Government subsidies in India compared to other countries are low, which should be increased.

Vadde Sobhanadreeshwara Rao, Ex-Minister for Agriculture

Organic farming is better, but it requires more government initiatives and support. Cost of cultivation in Andhra Pradesh is more this has to be reduced. Productivity is another area of concern. An effective and comprehensive Seed Act is required to regulate and control seed companies and ensure quality of seeds. Equally, bio-fertilisers and pesticides regulation is required. Market prices have to be better for the farmers. A Market Stabilisation Fund has to be established to rescue farmers. There is huge backlog in spending on agriculture in the 10th Financial Plan. This should be avoided. Spending on agriculture has to increase.

In India, product specific support is negative and non-product specific support is very low. One does not know why Indian government is keen on investing Rs 400 crores (US$86.3mn) on US-India Knowledge Initiative while US is not committing even a dollar on this.

Suravaram Sudhakar Reddy, Member of Parliament (MP), CPI

As per the Ministry of Home Affairs, of the five lakh suicides across the country, majority of them are farmers. As Census reports, nearly 72 lakh farmers have disappeared from agriculture. Crisis in agriculture started parallel to the changes brought by economic reforms. India is becoming dependent on imports. In the 14th Lok Sabha, three or four times there was serious discussion on agriculture. In these debates, P Chidambaram has said credit facility would be increased and natural resources would be improved.

Highlights of Participant Responses
Veladri, Research Scholars Association, Osmania University, Hyderabad

There is no health insurance for agricultural labour and their families

Narasimha Raju Yadav, organic farmer

Agriculture should have it glory back. Farmer should have confidence and social respect.

Sitaramaiah, Farmer

One needs to have a road map, on what is to be done for Indian agriculture

B Sarangapani, Faculty of Economics, Hindu College, Machilipatnam

Threat to Indian agriculture is distinct. However, anti-dumping provisions have not been used properly in India