Farmers Want India to Quit WTO

Farmers agitation

 Of late oranges and apples are increasingly dumped in to Indian markets from California or New Zealand,  small farmers in Punjab are distressed for  not receiving even half the cost of production.  Today, WTO has become a major  barrier for both  crop MSPs and Public Stock Holding (cheap ration under PDS).This is the outcome of India’s entry in to  WTO nearly three decades back. After nearly three decades of WTO, our  farmers are in distress and over 10,000 died by suicide in 2019 alone(Down to Earth, 2020).  WTO has become a  market platform for global multinationals to  exploit  third world agriculture and reap huge profits. That’s why  agitating farmers are demanding India to quit WTO.

When India joined WTO, big promises were made to farmers. It was stated that increased access to global markets for farmers will mean more exports and additional income. However, contrary to the original  claims,  World Trade organization instead of  facilitating free trade among  developed and developing nations through negotiations, all through its  three decade long existence  proved to  benefit only  rich  western multinational corporations on the expense of  poor  farmers from developing nations. Often urging developing countries to further open up their markets by  lifting all tariffs and subsidies.  For long  the  Cairns group (Western nations) have been resorting to un-ethical trade barriers and  artificially  lowered prices of  agricultural  products  exported from developing  countries.

Under the  “trade Facilitation”  flood of heavily subsidized agricultural  products from  Rich western countries, much lower to local crop cost of cultivation bankrupted the lives of millions of small farmers. Today we are  experiencing the influx of  apples from Newzeland and  oranges from USA, costing high prices to consumers and  depriving remunerative prices to  our farmers.   After accepted WTO conditions, our  agricultural  produce (starting from   rice, chenna dal to  Methi and Jeera) is being  traded by Western stock & feature market brokers and grain   whole-sale dealers bringing misery to our farmers. Even, originally claimed  WTO mechanism of  Quantitative Restrictions (QRS) failed India  in  for settling trade disputes in most of the disputes.  Now, developed countries are seeking removal of subsidies like Minimum Support Prices , low  Public  Stock Holding of food grains (by FCI  for PDS needs).  Already Amazon, Walmart and other multinationals have  entered online the local food markets and started seriously affecting lives of  farmers, small and medium retail traders. That’s why agitating farmers are demanding a law to  legally ensure implementation of crop MSPs.

 Subsidies, Boxes and Peace Clause

 WTO   equates produced food   a mere trading commodity in markets and  convinently  ignores  the prime responsibility of  feeding billions of hungry poor  in  developing world. In WTO terms  any subsidy  given to a small farmer in Sudan or Jharkhand  is viewed in  only trade angle. WTO agriculture negotiations, sanctions on subsidies revolve around the way trade-distorting subsidies. In  WTO terminology, subsidies in general are identified by “boxes” which are given the colours of traffic lights: where  green (permitted), amber (slow down and need to be reduced), red (forbidden).  Developing countries  should not exceed a subsidy cap (on cost of production) of 10 percent of Amber Box. While  the  rich developed nations in to the Green box, where there are  practically no limits on subsidies on food production given to their farmers. The  subsidies are calculated based on cost of inputs (seeds, electricity, diesel, MSPs) at 1986 prices and are not  revised conquerently. Thus, making  developing south’s products cheaper in comparison to those of  developed western countries. In fact, the cost of food production has increased 6 times (between 1986 and 2022  and livelihoods of millions of farmers became severely vulnerable. Developed Western nations routinely  allege that  developing nations are dumping in to world markets  much cheaper  food produce, which is a blatant lie. It is highly objectionable  to compare a small farmer from Sudan  making high profits by dumping cotton in to world market and  causing losses to an American cotton farmer.

    By imposing a 10 % cap on  domestic  support prices to cost of  production, WTO is  restricting   India and other  developed nations  not to rise  agricultural subsidies. For example, USD 630 billion  went to producers individually either directly from government budgets or implicitly through market price support.Much of this support  goes to large agri-bussiness corporations and not to individual farmers. A  huge problem with WTO’s provision on subsidies are heavily tilted to favour rich nations.  Both USA and European Union regularly subsidize their farmers. The subsidy limits they provide are not  directly visible   but hidden  behind several clauses of  WTO Green Box. They do not invite penalties  as the hidden sub-clauses  protect  them from legal challenges and WTO sanctions.

 Obstacles for Right To Food

 WTO imposed 10 percent  cap on procurement of food grains by Indian government to meet needs of  Public Distribution System (PDS), Is increasingly being challenged by USA and other western nations.  For example in 2022 India  procured 60 mln T of rice from small farmers  to meet its PDS Needs under National Food Security Act. So far, India is able to partially protect it self  from Peace clause  provisions  negotiated in Bali (2014). As now,  the 10 percent  subsidy limit is crossed,  WTO is objecting limits of  India’s Public Stock Holding (of food gains) system and asking to rewind  MSP and subsidies or  face WTO trade sanctions. The  Agreement on Agriculture (WTO) has been a key barrier to realizing the right to food. The existing rules need to change.

The fact that  nearly  40 percent of  global food grain, pulses and oil seeds trade is being  controlled by. Corporate control of  food production is not just  limited t seeds, fertilizers, marets and food marketing  value chains  but  the  hold of global multinational grain cartel is very strong. A handful of agribusiness corporations like Cargil, ADM, Zenoh control nearly 50 percent of global grain trade.  By  creating artificial shortages thse cartel  are  suspected to be responsible  for severe food shortages in Africa and Asia in 2009.

India is a big  foodgrain market of 140 crore people. These western  agribusiness cartels in collusion with  our major  domestic   traders like Reliance and Adani want to eliminate  crop MSPs, subsidies, PDS and  eventually dismantle food  souverenity. Grain Public Stock Holding is  used to stabilize domestic prices and reduce consumers’ exposure to food price volatility, as well as to distribute food to vulnerable groups.

Increased integration of Indian agriculture with world agricultueral markets endangers livelihoods of crores of small  and tenant farmers and landless farm workers and  opens gates to corporate sector. The  pursued state policies (which accelerated in present BJP regime) is in favor of  handing over both agriculture, markets and food trade to  domestic  corporate and  global grain  multinationals. Alternatively, India should  mobilize all developing nations in WTO  to  delink Quantitative Restrictions (QRs)  to selectively delink  their agricultural economies from the purview of  AOA, WTO. This action alone will safeguard domestic subsidy support,  protect MSPs, Public Grain stock holding  so as to secure food security. That’s why  farmers are demanding  legal guarantee for  MSPs   and agitating  to  protect PDS  together with workers.

Dr. Soma Marla, Principal Scientist, Genomics, Retd, ICAR, New Delhi.

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