Sponsor: South Asia Network of Economic Research Institutes (SANEI)
Trade in agriculture remains one of the most contentious issues within the broader topic of Pakistan-India trade. The main source of contention is the difference in policy regime vis a vis agriculture in the two countries. India, for reasons of food security, has extensive price support mechanisms and gives substantial input subsidies to its farmers. Moreover, high tariff rates and a range of nontariff barriers protect the Indian farmer from global competition. In sharp contrast, the government of Pakistan has over the past decade and a half gradually phased out agricultural subsides, reduced external tariffs and withdrawn price support on most of the crops. The farmers associations and lobby groups in Pakistan emphasize this difference in policy regime and claim that opening trade with India in agriculture under such conditions would hurt Pakistan’s agricultural sector. This paper will attempt to investigate that claim by analyzing the agricultural policy regimes in both the countries using secondary and primary sources of data and information. The study would also look at the potential of agricultural trade in selected crops using both quantitative and qualitative methods. The study will benefit from a recent data set collected by LUMS for ICRIER, Delhi on trade perception. The data will be used to draw out the perception of stakeholders in the agricultural sector. The Key objective of the study is to deepen understanding of issues revolving around agricultural trade between Pakistan and India. These will be assessed in light of Pakistan’s intent of granting Non-Discriminatory Access (NDA) to India in the near future.