Impact of Globalization on Agriculture

The experts are divided on the impacts of globalization on agriculture. They say that India will get benefited through improved prospects for agricultural export as a result of increase in the world prices of agricultural commodities with reduction in heavy farm subsidies provided in the developed countries and breaking of barriers to trade.

The prices of agricultural products in India are not likely to increase as all major programmes such as subsidies on P.D.S. (Public Distribution System) and on agriculture are exempted from the control of W. T. O. Agreement on agriculture. It is mainly because of the fact that subsidy given on agriculture in India is below the limit of 10 percent of value of agricultural products.

Furthermore, India has the skills and the low cost labours which make it one of the lowest-cost producer of agricultural products in the world. Hence, there will be a large market world wide for these products. Moreover, it is also said that an improvement in terms of trade in favour of agriculture will promote faster agricultural growth in India.

However, these claims are questionable on the following grounds:

(i) Due to globalization, the Indian farmers might have to face much unstable prices of agricultural products as world prices for these products fluctuate largely on year-to-year basis.

(ii) The impact of trade liberalizations on the prices of agricultural products at international level and domestic level depends on what policies other countries follow. For example, developed countries are not willing to reduce subsidies on their agricultural products, to keep these still cheaper to benefit their farmers.

(iii) Due to liberalization, MNC’s engaged in agro-business would operate freely in India. For their strong financial background, they could produce hybrid varieties of seeds and the specialised agro-chemicals, using advance biotechnology. These hybrid seeds cannot be regrown or reproduced by the farmers as they are genetically modified to terminate after first use. Therefore, these seeds will have to be purchased every year from the MNCs for the monopoly they have over it under IPR (Intellectual Property Rights) regime.

(iv) There would be uneven distribution of income across social classes and geographical region due to effect of globalization on agricultural practices and trade. Rich regions or social groups will be richer in the country.

Intellectual Property Rights (IPRs)

It is an important feature of the WTO agreements among the member countries related to intellectual property rights (IPRs). It covers copyright, trademarks, geographical indications including appellations of origin, industrial, patents on production of new varieties of plants and seeds, etc.

Under this agreement on the above subject all member countries have to (i) provide minimum standards of protection (ii) facilitate domestic producers and remedies for the information of IPRs and (iii) settle dispute between the WTO members.

The traditional knowledge of farmers and indigenous people in respect of uses of different variety of plants are being used by MNCs for their business profits patenting them under IPRs. The famous examples are patent of neem and turmeric product by American MNCs.