Parveen Kumar Nimbrayan

Genesis of World Trade Organization Genesis of World Trade Organization (WTO)(WTO)

• The General Agreement on Trade and Tariff (GATT) came into existence in 1947.

• It sought substantial reduction in tariff and other barriers to trade and to eliminate discriminatory treatment in international commerce.

• India was among the founding members to GATT in 1947 along with twenty two other countries.

• Eight rounds of negotiations had taken place during five decades of its existence.

• WTO Came into existence on 1-1-1995 with the conclusion of Uruguay Round Multilateral Trade Negotiations at Marrakesh on 15th April 1994.

What is Food processing?What is Food processing?• Food processing is set of methods and techniques used to

transform raw ingredients into food or to transform food into other form of consumption by human or animals in the food processing industry.

• Food processing typically takes clean, harvested crops or butchered animal product and uses these to produce attractive, marketable and often long shelf-life food products.

• Food processing industry (FPI) defines as “any food other than a raw agricultural commodity and includes any raw agricultural commodity that has been subject to processing such as canning, cooking, freezing, dehydration or milling.”

World wide Development of FPIWorld wide Development of FPI

1812- Canning of fruits and vegetables in USA.

1857- First Fruit and vegetable processing industry was started in Melbourne.

1927 to 1940- Processing and preservation was mainly carried out like preparation of juice, squash etc.

1942- First food processing industry in India.

Indian Food Processing Indian Food Processing IndustryIndustry

Government institutes and departments dealing with FPI

CFTRI 1950 •To promote FPI

FPO 1955 •To control quality of processed food

MPEDA 1972

•Projection of Indian marine product in overseas market.•Promotion of brackish water aquaculture for production of prawn for export

APEDA 1986 •To encourage Indian agro-based products

MOFPI 1988

•To increase the value addition of the perishable primary products

•To create job opportunity in rural areas

NIFTEM 2006•Work actively for assisting in setting up food standard, businesses incubation and can also include knowledge sharing.

Food processing industry in Food processing industry in IndiaIndia

• Food processing industry has reached a significant position in recent years both in domestic and international market.

• Processing is an important market function. People now a days are more dependent on processed products.

• Many technological changes have taken place in recent years. They include-

introduction of refrigerators,

modern methods of milling and baking,

new processing methods for dairy products,

modern methods of packing and preservation etc.

Cont…Cont…

The overall food industry reached 25.4 billion US$ in 2011 and is forecast to grow to 38.5 billion US$ by 2016.

We are now faced with an issue of selling our produce.

It is not just a simple question of finding mouths to feed it is also a question of taste, quality and safety.

It is about processing and packaging and presentation. Most importantly it is also about adherence to global standards in food hygiene and safety.

Status of food processing industry in Status of food processing industry in IndiaIndia

Source-MOFPI

Rank of industry 5th

Total industrial labor (%) 19

Total industry output (%) 14

Output of GDP (%) 7

Estimated turnover (₹ in crores) 2,55,200

Status of India in comparison of other countries Status of India in comparison of other countries (food processing)(food processing)

Processing of agriculture produce is around the world

Malaysia 80 percent

Philippines 78 per cent

Brazil 70 percent

USA 65 per cent

China 40 per cent

Thailand 30 per cent

Source-FICCI report 2010

India's levels are significantly low compared to international levels.

•With only 2.2 percent of processing levels for Fruit and Vegetable (F&V)

•35 percent for milk,

•21 percent for meat,

•6 percent for poultry products and

•38 percent for agriculture produce,

Key Food processing sectorsKey Food processing sectors Fruit and vegetable processing industry

Cereal based consumer food industry

Dairy processing industry

Meat processing industry

Beverages processing industry

Marine product processing industry

WTO Agreements which affect WTO Agreements which affect Food processingFood processing

• Agreement on Agriculture (AOA)

• Agreement on Sanitary and Phyto Sanitary

• Agreement on Technical Barriers to trade(TBT)

• Trade Related Aspects of Intellectual Property Rights (TRIPs)

• Trade related investment Measures (TRIMs)

WTOWTO--AoA NEGOTIATIONSAoA NEGOTIATIONS

STATE OF PLAYSTATE OF PLAY

Agreement on Agriculture (AOA)Agreement on Agriculture (AOA)• Three main areas are covered

– Market access (trade restrictions confronting imports)

– Domestic support (subsidies are provided to the farmers)

– Export subsidies (methods to make export)

• Market access includes

– Tariffication,

– Tariff reduction.

Agreement on Sanitary and Phyto SanitaryAgreement on Sanitary and Phyto Sanitary• Article 20 of the GATT allows governments to act on trade

in order to protect human, animal, plant life or health

• Member countries are encouraged to use international standards, guidelines and recommendations where they exist.

• The agreement includes provisions on control, inspection and approval procedures. Governments must provide advance notice of new or changed sanitary and phyto sanitary regulations, and establish a national enquiry point to provide information .

• An important CODEX guideline for food processing companies is to follow a food quality management system call led Hazard Analysis and Critical Control Points (HACCP).

Agreement on Technical Barriers to Trade(TBT)Agreement on Technical Barriers to Trade(TBT)• It tries to ensure that regulations, standards, testing and

certification procedures do not create unnecessary obstacles.

• It covers:

– Standards relating to all types of products including industrial and agricultural products, with the exception of aspects of food standards related to sanitary and phyto sanitary measures

– Numerous measures designed to protect consumers against deception and economic fraud (e.g. quality and labeling)

Trade Related Aspects of Intellectual Trade Related Aspects of Intellectual Property Rights (TRIPs)Property Rights (TRIPs)

1. Intellectual Property Rights (IPRs) and Patents‘

– IPRs refer to the legal ownership by a person or business of an invention/discovery attached to particular product or process which protects the owner against unauthorized copying or imitation.

– There are seven types of IPR viz., Copyright, Trademarks, Geographical Indications, Industrial designs, Patents, Integrated circuits and Trade secrets.

2. SUI GENERIS : PBR/PVP

– The sui generis system is a diluted form of a patent and it provides a framework of plant breeders rights (PBR) through which protection is accorded to the breeders, researchers and farmers with regard to use and exchange of seeds and plant genetic material.

Trade Related Investment Measures Trade Related Investment Measures (TRIMs)(TRIMs)

• This agreement, negotiate during the Uruguay round, applies only to measure that affect trade in goods.

• This agreement recognize that certain investment measures can have trade-restrictive and distorting effects, it states that no member shall apply a measure that is prohibited by the provision of GATT Article III (national treatment) or article XI (quantitative restriction)

Link between WTO & Food ProcessingLink between WTO & Food Processing

• Supplier side– increased food processing

industries– Increase in competition– Increase in producer prices– increase innovations– Increase in output– Increase profit– Increase in vertical integration.– Increase the level of investment

(FDI, infrastructure development)

•Demand side– increase in market size – Increase in selectivity– Increase in specification– Increase of standardization– Increase in consumer satisfaction– Food Safety

References References • Prabhakar Rajkiran and Shilpi Raj, (2013), Present status and

future prospects of food processing industry in India, International journal of trade and global business perspective, Vol 2, No 3

• FICCI, (2010), Bottlenecks In Indian Food Processing Industry (Survey Report), 19-24.

• www.mofpi.nic.in

• www.apeda.gov.in

• www.mpeda.com

• www.faostat.fao.org

• www.indiastat.com