Sunday, July 30 2006 13:25 Hrs (IST) - World Time -

New Delhi: Developed nations should phase out agricultural subsidies by 2013 to augment growth and ensure a level-playing field for the global farm sector, industry body Assocham has demanded.

The Chamber pointed out that the Organisation of Economic Cooperation and Development, a body of developed nations, extends agricultural subsidies to the tune of 42 per cent of their GDP whereas in a developing country like India such subsidy stands at 1.3 per cent of its GDP.

India, which used to extend a subsidy of five per cent at the start of WTO negotiations, has over the years reduced its farm subsidies and lived upto its committments, it said.

In contrast, the developed nations have increased their subsidies from 38 per cent to 42 per cent, the Chamber said in a statement.

The committment given out by the developed world at the concluding session of the WTO Hong Kong Ministerial for phasing out farm subsidies by 2013 should be closely monitored by developing countries to ensure that it is honoured in letter and spirit, Assocham President Anil Agarwal said.

The industry body also recommended a no taxation policy for the agriculture sector and has urged the Government to rework its subsidies extension mechanism, 40 per cent of which is cornered in curtailing fertiliser prices.