The WTO Agreement on Agriculture
and Tropical Commodities:
A Study in the Context of South India
Abstract: This paper examines the globalisation of agriculture as reflected in the Agreement on Agriculture (AoA) and preferential trade agreements, on trade in selected tropical commodities. The paper examines tariff rates under the ASEAN-India Free Trade Agreement (AIFTA) and finds a reduction in rates for several commodities in relation to WTO bound rates. The fall in tariff rates reduces the ability of a country to check price falls and price volatility. In a period of fragmentation of land holdings, atomisation of farming, and weakening of the bargaining power of producers, State intervention has encouraged competition among producers at the upstream end and limited competition at the downstream end. Evidence for this is provided by calculating intra-industry trade indices for India and rest of the world for natural rubber and related products. The paper argues that commodity problems cannot be addressed without changes in policy and cooperation among commodity producing countries.