More accurately, the rural sector hasn’t done well, regardless of the indicator used. There is a long list of pending reforms required to reverse this trend—land markets, degradation issues, irrigation, efficient water usage, encouragement of commercialisation and diversification, creation of off-farm employment, credit, insurance, futures markets, disintermediation of distribution chains and removal of unnecessary controls, public investments as opposed to input subsidies, scrapping price signals that artificially favour rice and wheat, improving research and extension and development of rural infrastructure. This is a domestic reform agenda. And these reforms are mostly state subjects. Yet, the travails of Indian agriculture are invariably ascribed to the World Trade Organisation. The WTO is a convenient scapegoat here too, as it is in France, South Korea or Japan.
Before the Uruguay Round (1986-94), there was no attempt to liberalise agriculture through multilateral agreements. Indeed, developed countries sought to keep agriculture out of the purview of all free trade agreements. The Uruguay Round brought in some discipline on domestic support, export competition (including export subsidies) and market access (tariffs and quantitative restrictions on imports). Unfortunately, the way the Uruguay Round’s agreement on agriculture (AOA) was drafted, it contained plenty of devils in the details, including exemptions (the multi-coloured boxes) from reduction commitments. Not only did the promised market access liberalisation not happen, export subsidies in developed countries actually increased.