Indian farmers’ position on WTO

The farmers of India are very much concerned with the recent developments in the WTO negotiations on agriculture. In the current negotiations to conclude the modalities on agriculture before the General Council in end July, it is becoming clearer that once again the interest of India and other developing countries and their farmers are in danger. 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. We had 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.

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, Indian farmers were quite hopeful that their interest would be paramount in its 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 yet Mr. Sharad Pawar, Union Minister for Agriculture, in a live television interview (CNN-IBN- June 4) 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 UPA 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 the government refused to pay an MSP of above Rs. 7000/- per tonne to Indian farmers but it is paying Rs. 10500 per tonne to AWB, which is procuring wheat from 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 small section of big “farmers” and 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 farmer stand to lose from the proposed large tariff cuts under negotiations. Any further lowing of tariff on agricultural goods would be disastrous for small and marginal farmers of the country and would lead to an epidemic of farmers’ suicide. It would jeopardize our self-sufficiency in food, increase our dependency on agricultural imports and reduce the margin between applied and bound rates, thereby restricting future governments from freely changing tariffs.

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 recent Domestic Support Simulations conducted by Canada which proved that neither the U.S. nor the E.C. will have to make reductions in their domestic support payments (as per their current proposals) and 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 claim that they are under extreme pressure from number of 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 2006).

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, but these are the only safeguard available to the developing nations given the proposed deepest cut in import tariff. But US and EU does not want to offer even these minimal safeguard to the developing countries to protect their farmers from cheap subsidized imports. Therefore there going to be a complete disaster for the farmers and agriculture of the developing countries if this present offers 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.

In view of the above, we, members of the farmer unions, in a letter to the Prime Minister, have appealed to save the interest of Indian farmers and Indian agriculture in the current WTO negotiations. We appealed to him that India should play a positive role in ensuring that the Doha Development Round does not end with the interests of the developing countries being compromised.

We also appealed to him, that his government:
·    must increase the import duties on all agricultural products including cotton to stop the flow of subsidized imports and protect the national food sovereignty;
·    do not reduce agricultural tariff and bind the agriculture tariff at the current applied rates;
·    reinstate Quantitative Restrictions (QR’s) to prevent dumping of artificially cheep and subsidised products, destroying farmers’ livelihoods and the nations’ food security;
·    must demand for the fisheries sector to be taken out of the NAMA negotiations and out of the WTO;
·    change its exclusive focus on corporate agriculture and instead focus its policies on farmer centered and earth entered low lost high output biodiverse organic farming;
·    ensure that the Indian negotiators must not give up agriculture for some concessions in other areas e.g. GATS;

Yudhvir Singh                                     Rakesh Tikait
Dehradun, 18th June 2006
Indian Coordination Committee of Farmers’ Movement

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