Developed countries have adhered to the rates agreed upon at the Uruguay round of General Agreement on Tariffs and Trade (Gatt) in 1995 whereas India has given prominence to globalisation over internal liberalisation.

The policy-makers have made the country a favourite dumping ground even before the culmination of World Trade Organisation. For agriculture, India chose the option to establish maximum tariff ceilings in converting quantitative restrictions to tariffs for all agricultural commodities, including oilseeds and edible oils. For most products, India is not required to reduce tariffs during the 10-year implementation period (1995-2004). However, no new non-tariff measures will be introduced during the period, unless they can be justified under the WTO provisions. Since India also pursued this option, it is alsoexempted from minimum access commitments.Once India reduces the rates below the stipulated Gatt bindings, it will not be able to increase it after the implementation period is over provided it reduces substantially in other commodities.

The Uruguay round of Gatt mandated trade measures specific to developing countries. It required India and other developing countries to:

a) convert non-tariff barriers into bound duties;

b) bind all tariffs and tariff equivalents;

c) reduce the new bound tariffs, as well as tariffs which had been bound in previous negotiations, by at least 10 per cent per tariff item and by 24 per cent on a simple (unweighted) average over 10 years (1995-2004) and;

d) for commodities subject to tariffication, establish minimum access opportunities at two per cent of 1986-88 consumption in 1995, rising to four per cent in 2004.

The Uruguay round agreement in agriculture defines non-tariff measures to include quantitative restrictions, minimum import prices, variable import levies,discretionary import licensing regimes, non-tariff measures applied through state-trading enterprises, voluntary export restraints and similar border measures other than ordinary customs duty. These non-tariff measures had to be replaced by a tariff equivalent. This tariff equivalent is a customs duty designed to provide the same level of protection as the non-tariff measure.

Developing countries had the option of setting maximum tariff ceiling bindings instead of tariff equivalents of existing non-tariff measures. The binding of all tariff items at the established maximum levels was also accepted in lieu of reduction commitments.

In addition, if the option of maximum tariff ceilings is chosen, the country is exempted from the minimum access commitments. Under these contracting parties are to provide minimum level of import access opportunities for products subject to tariffication. Minimum access will be ensured by a tariff-quota.

Take the case of only two major commodities edible oils and sugar whichare highly politically sensitive. Presently India has levied almost negligible rates of import on both the politically sensitive agro-products edible oils and sugar. Edible oils are placed under open general license and the prevailing comprehensive duty is 25 per cent (20 per cent import duty plus five per cent surcharge) whereas sugar carries a meagre five per cent that too imposed only last month.

None of the political party wants to loose the vote-bank by either reducing the availability of these products or increasing the prices.To keep the public happy no one seems to bother that the country will end up being totally dependent on the international supply and expose itself to the maneuverability of the exporting countries.

Consider the scenario in next 10 years. Both the agro-products are vulnerable to climatic conditions domestically as well as internationally. Last year's supply-demand gap was estimated to be in the range of 8-10 lakh tonnes of edible oil and the imported content was about 17-18lakh tonnes. Due to excessive imports the domestic prices remained subdued throughout the year.It turned out to be good for the consumers but less lucrative for the farmers.

The current year's production of oilseeds is going to be lower than last year due to various reasons but chiefly owing to loss in crop of mustard and prospect of less remuneration to the farmers leading to a wider gap in the domestic supply of edible oil. One can't help but notice the fall-out of the export ban laid by the Indonesian government on its edible oils during last four months. India imports only about 20 percent of its total oil imports from Indonesia and balance from Malaysia. India witnessed a sharp price-rise during this period in its domestic edible oils as its 20 percent supply was cut-off.

If the country can be affected to such a drastic extent by a small supplier it does'nt take much to imagine the scenario in case of total dependence on imports.

Same is the case of sugar. India is one of the largest sugarproducers in the world. Ironically instead of exporting the product the country has resorted to its import at a negligible five per cent duty. Everybody is well aware that huge amounts of arrears have been accumulated to be paid to the farmers. If the sugar is to be dumped into the country by international players it would be too late to remedy the situation.

India is a major buyer in the international market and it has been noticed in the previous instances where the exporters jacked up their prices as soon as they learned about India's decision to import a particular commodity.

Even the World Bank in one of its report has accepted that given the world market prices of oilseeds and edible oils, the effects of a more open trade regime are a major concern. Taking into consideration the future scenario in case of subsidised custom duties it would be prudent to take precautionary measures than run for a cure when the situation worsens later.