The Tribune, Chandigarh, India

Tuesday, September 5, 2000,
Chandigarh, India

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WTO: Punjab faces the heat
By Sarbjit Singh
Tribune News Service

CHANDIGARH, Sept 4 — With the implementation of the first phase of the World Trade Organisation regime in the country, Punjab has started facing the heat. This was admitted today by the Punjab Government. Foodgrains, which was a major weapon in Punjab’s armoury to use as political clout at the national level, has become a liability as well as a problem for the state.

In fact, Punjab has been bending on both knees for the past several months before the Union Government requesting it to move out wheat and rice stocks from its overflowing godowns to make space available for the forthcoming kharif crops. However, southern states, which earlier used to be deficit states as far as wheat and rice are concerned, have no such problem now. Because of the negligible demand from the southern and other states, the Union Government is also facing a problem in moving out the wheat and rice stocks from Punjab.

Capt Kanwaljit Singh, Punjab Finance Minister, said today that as wheat was imported under the WTO from Australia about two years ago in the coastal states, the demand for Punjab wheat in those states declined tremendously adding to the woes of the hugely wheat and rice surplus state (Punjab).

As paddy will start arriving in the state’s markets in the third week of September, Punjab’s Chief Minister, Mr Parkash Singh Badal, is repeatedly making phone calls to the Union Food Minister, Mr Shanta Kumar, to allow the procurement of paddy from September 15 in the state. But Mr Badal’s calls have not got a satisfactory response from Mr Shanta Kumar so far. Mr Badal has also approached the Prime Minister, Mr Atal Behari Vajpayee, with regard to the paddy procurement issue.

All these issues and problems have made the Punjab Government sit up. Capt Kanwaljit Singh said that the WTO regime in its existing form in the country was not acceptable at least to Punjab. When the Congress government led by the then Prime Minister, Mr P.V. Narasimha Rao, signed the WTO agreement in December, 1994, it did not take any state government into confidence and also no countrywide debate was held on the implications of the agreement before signing it.

He said a committee of experts headed by Prof Y.K. Alagh, former Union Minister for Power and Planning and Chairman of the Agriculture and Industrial Costs and Prices Commission, had been set up to suggest measures and to protect the interest of Punjab farmers, milk producers, poultry farmers, others dependent on the agriculture industry and industry with special reference to small-scale units.

Other members of the committee are Mr Rakesh Mohan, Dr G.S. Kalkat, Prof G.S. Bhalla, Dr S.S. Johal, Dr V.P. Dubey, Dr Parmod Kumar, Dr H.S. Shergill, Dr Sucha Singh Gill, Mr C.L. Bains, Mr Sudhir Mittal, Mr D.S.Guru and Mr B.M. Mahajan. Mr H.I.S. Grewal, Additional Secretary, Planning, and Economic Adviser, Punjab, had been appointed member secretary of the committee. The terms of reference of the committee included the preparation of a position paper on the WTO and suggesting of policy measures and administrative restructuring to take advantage of the WTO regime with special emphasis on agriculture and industry. The committee had been asked to submit a report within two months.

Capt Kanwaljit Singh said the state would put pressure on the Union Government to make safeguards a part of the WTO regime when negotiations would be held next time to implement the remaining part of this regime. He said there was no provision to control the prices of agricultural inputs in the regime. The state government wanted that there should be a provision to control the prices of inputs as farmers would have to sell their produce at the most competitive prices in the absence of any sort of restrictions on the import of wheat, rice, etc, from abroad.

The Union Government should discuss with all states the adverse affects of the WTO regime on the states in the country. He said that not only Punjab, but also other states having small-scale industry as a base of their economy would be hit by the WTO regime. Already reports pertaining to the sale of bicycles (made in China) for Rs 500 or so in Ludhiana and other parts of the country had sent shock-waves among the industrialists concerned. Many Japanese and Chinese products were available on footpaths in Delhi at low rates.

While the WTO regime has started casting its shadow, Punjab has not prepared any blueprint of options available to it for shifting from the traditional crop pattern of wheat and paddy to other crops to compete in the world market and to face the WTO challenge.