Indian farmers and the WTO
by 11.07.2006 15:23-
We are very much concerned with the recent developments in the WTO negotiations on agriculture. In the current negotiations to conclude the
And we fear that the Indian government, driven by its offensive interest in services, would try to push through a deal for conclusion of the Doha round even at the cost of its million of farmers and industry workers. And in fact we witnessed this in Hong Kong where India betrayed other developing countries in joining hands with US and EU to protect services text in exchange of minor gains in agriculture. And given the Indian government's neo-liberal agenda and proximity with US in last few months, we fear that the Indian negotiators would favour the US agenda in order to protect the interest of corporations and elite class of India through liberalization of services.
Today it is clear that the Indian position in WTO is driven by its offensive interest in services negotiations. India has no stake in agricultural negotiations and we are quite apprehensive that any tradeoff in services negotiations can change Indian position in agriculture.
When UPA government came in power largely with the support of farmers and rural India, we were quite hopeful that farmers interest would be paramount in the government's agenda. But last two years of UPA rule has brought misery and destitution for the rural community and never before there were such severe agrarian crisis as it is today. Every day dozens of farmers are committing suicide and Mr. Pawar heading agriculture ministry, in a live television interview said that “100,000 farmers suicide per year is a normal thing that we have been seeing for a number of years”. This is the height of government’s apathy towards farmers. And ironically even the relief packages announced by this government to deal with agrarian crisis are corporate driven and only promote the interest of the US biotech industries like Monsanto and their
agribusiness like Cargill and ADM. And quite obviously three giant US corporations (Monsanto, Wal-Mart and Archer Daniels Midland) along with an Indian agribusiness ITC have got formal entry in the Indian government system as board members of the “Indo-US Knowledge Initiative on Agricultural Research and Education”, launched during the US President’s recent visit to India.
In last two years the Indian government has done a lot to protect interest of the corporate India at the cost of the poor and marginal class. Most of the agricultural related policy introduced by the UPA government has been to further the agenda of corporate globalization. The introduction of seed bills 2004; changes in the agriculture produce marketing act (APMC Act); the food safety and standards bill; withdrawal of food subsides for the poor under BPL programme; the contract farming; liberalization of imports for seeds and planting material; increased commercialization of GM cotton and field trials for GM food crops; providing data exclusivity to MNCs in agro-chemicals; and completely liberalizing imports of food grains are some of those decisions which favours only the corporations. Recently we witnessed a classic example
of anti farmer and pro corporate policy of the UPA government when it signed a deal with AWB Ltd of Australia for import of 5 lakh tonne of wheat, at the time of harvest in India and at a price much above the MSP price for procurement of wheat from farmers. Though government refused to pay an MSP of more than Rs. 7000/- per tonne of wheat to Indian farmers but it is paying Rs. 10500 per tonne to AWB Ltd which is purchasing wheat in the Indian mandies at a little extra price than the MSP and supplying the same Indian wheat to the government.
In view of the above, we fear that in the ongoing negotiations on agriculture as well, the UPA government will jeopardize the interest of Indian farmers by accepting whatever scrap being offered by US and EU. And this will be done on the name of protecting the export interest of an extremely miniscule section of big “farmers” as well as corporations like ITC.
In the current negotiations on agriculture, the main issue is about deciding the formulae for tariff cuts and subsidy cuts. In view of the impact of
removal of quantitative restrictions, Indian farmers stand to lose from the proposed large tariff cuts under negotiations. Indian negotiators assure that the proposed tariff cut would not affect Indian farmers because there is enough water between applied tariff and bound tariff. But the fact is any further lowering of tariff on agricultural goods would be disastrous for small and marginal farmers of the country. Any further cut of import duty would be disastrous for the farmers and would lead to an epidemic of farmers’ suicide. It would jeopardize self-sufficiency in food, increase dependency on agricultural imports and reduce the margin between applied and bound rates, thereby restricting future governments from freely changing tariffs.
Subsequent developments in the WTO have shown that the developed countries are not willing to concede an inch even on the pitiful concessions being sought by the developing countries. The ongoing negotiation on agriculture is not different either. In return for the increased market access, the US and EU are offering artificial reduction in their domestic support and the proposed cut will not make any change in their applied level of support. Instead it allows them to raise their overall subsidies level. This was made clear in the Domestic Support Simulations conducted by Canada on behalf of 12 countries. This technical paper proved that neither the U.S. nor the E.C. will have to make reductions to their domestic support payments (according to their current proposals) and that in fact, the U.S. in particular, will be able to increase overall spending in the amber and blue boxes and the de minimis. It found that under the U.S. proposal, U.S. agriculture spending could legally increase to $22.5 billion a year, from last year’s estimated $19.6 billion, simply by re-categorizing existing payments.
The US trade official also claims that they are under extreme pressure from numerous leading U.S. agriculture organizations who demand lowering of U.S. ambitions on domestic support. That means there can’t be any further increase in the current US offer for reduction in domestic support. Moreover, the US is not ready to concede an effective protection for the developing countries through SPs and allows only five tariff lines (against a demand of 20% by the G20) to be self designated as SPs (US framework paper on SP of 6th April 2006) which is less than 1% of India’s total tariff line (680) in agriculture. Even on Special Safeguard Mechanism (SSM), US intentions are not very clear and it is trying to limit the scope of this safeguard to an extent that recourse to such mechanism becomes useless (US proposal of 24th April
In fact all the so-called gains from the Hong Kong Declaration are proving to be illusionary. Even though SP and SSM are not effective safeguard mechanisms to deal with cheap subsidized imports as compared to quantitative restrictions (QR’s), but these are the only safeguard available to the developing nations in view of proposed deepest cuts in import tariffs. But US and EU do not want to offer even these minimal safeguards to the developing countries to protect their farmers from cheap subsidized imports. Therefore there is going to be a complete disaster for the farmers and agriculture of the developing countries if this present offer on the table goes through.
It is now clear how tough it is to get so little from the developed countries on any issues which is of the interest of the developing countries and LDCs in the agricultural negotiations. We therefore reassert our demand that agriculture must be kept out of the perview of the WTO.
Several recent studies have also indicated the same and predicted loses for developing countries including India from the Doha Development Round, in the agriculture as well as industrial sectors. Contrary to commonly held view, research from the World Bank, the Carnegie Endowment and the European Commission reveal that the majority in Asia and Africa will be faced with losses in both agriculture and industrial goods liberalisation. Even EU's own impact assessment of the Doha Round foresee that many of the world's developing economies will lose out from the Round, including parts of South Asia and much of Sub-Saharan Africa.
from an open letter by several members of the following organisations:
KRRS; BKU; BKU Delhi, BKU Punjab
Karnataka Rajya Ryots Sangha; BKU, Uttar Pradesh; BKU Rajasthan;
Shetkari Sangatan (Maharashtra); BKU, Haryana; BKU Uttranchal;
Kisan Sangharsh Samiti (MP); BKU, Himachal Pradesh; BKU Maharashtra;
Tamil Nadu Farmers Association
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