NEW
DELHI - Agriculture and trade experts in India - a
country with 650 million farmers - are not sharing the
euphoria of the government at having supposedly pulled
off a favorable farm deal at the just-concluded World
Trade Organization (WTO) framework negotiations in
Geneva.
An official statement released by
the Indian delegation at Geneva headed by Minister for
Commerce and Industry Kamal Nath claimed that the
revised framework for negotiations adopted by the WTO
general council in Geneva late Saturday had met key
Indian demands. "We got what we wanted. We have been
able to protect our defensive as well as offensive
interests in agriculture," Nath was quoted as saying by
Indian media reports on Sunday.
But
the powerful National Farmers Coalition (NFC), which
represents 75% of India's farmers and has on board
political leaders such as the Communist Party of India's Atul
Kumar Anjaan, thinks otherwise. "India and other
developing countries should understand that they have been had by
the complex technical language which now actually allows
the United States and the European Union to increase
their domestic support [of agricultural products],"
said Devinder Sharma, a spokesman for the NFC. "The exports
of these countries can actually be dumped on
others."
Sharma said the
framework would still work out to have an import
substitution effect to the extent that large domestic
subsidies would allow for a substantial lowering of
prices of agricultural products originating from the US
and the EU.
The WTO's 147-member general council
adopted over the weekend, in Geneva, an agreement that
aims to cut subsidies to farmers in wealthy countries
and bring down barriers to the multibillion-dollar
agricultural trade. Two weeks of talks ended with a pact
pledging "substantial reductions" in the tariffs and
subsidies by which Europe, the US and Japan have
distorted markets for agricultural-exporting nations. At
the same time, the agreement allows countries to protect
certain "sensitive products", leaving the details to be
negotiated.
While Nath claimed that Indian
farmers have been "completely protected as no
significant product that would adversely affect our
agriculture sector has been allowed access", Sharma said
that in practice India, like other member countries, would be
compelled to make "substantial improvements in market
access for all products". Sharma said there was a
need to look more closely at the "market price support"
(MPS) component of these "subsidies". The MPS is the gap
between domestic and world prices at the farm gate.
The EU "total support estimate" (TSE) was,
according to the most recent Organization for Economic
Cooperation and Development report, 121.89 billion euros
(US$146.9 billion) in 2003 and the US TSE was $94.07
billion.
"But considering the MPS as a true
subsidy implies that it is meaningless to align domestic
agricultural prices to world prices. These world prices
make no sense - they are highly dumped prices and highly
volatile," said Sharma.
Close readings of the
framework by Sharma and other members of the National
Farmers Coalition reveal a sleight of hand made possible
by playing on the distinction between authorized levels
of support and actual applied support. "These
distinctions are commonly misunderstood by
non-specialists at trade talks and seem to have happened
once again," Sharma said.
There has also
been box shifting from amber to blue and then the green
box with misleading interpretations of words like
"subsidy" and "support". The EU has substantially
reduced its administered prices ("intervention prices")
since 2002 and compensated for these reductions by blue
and green subsidies.
In WTO terminology,
subsidies in general are identified by "boxes" that are
given the colors of traffic lights: green (permitted),
amber (slow down - ie be reduced), red (forbidden).
In agriculture, things are, as usual, more
complicated. The Agriculture Agreement has no red box,
although domestic support exceeding the reduction
commitment levels in the amber box is prohibited; and
there is a blue box for subsidies that are tied to
programs that limit production.
The
National Farmers Coalition said it would release a detailed
analysis of the WTO framework for negotiations and
explain its true impact for farmers in India, who have
been hit by falling prices and poor returns ever since
embarked on a program of liberalization a decade ago.
Indeed, the defeat of the right-wing Bharatiya
Janata Party government in elections between April and
May was attributed largely to widespread resentment
among farmers in rural areas that they had been left out
of the benefits economic restructuring.
In
states such as Andhra Pradesh - which took a lead
in economic restructuring with direct support from the
World Bank - many farmers have committed suicide as a
result of their inability to repay rising debts and
costs of farming inputs including electricity.
Farm experts have attributed the suicides to
the emphasis laid on unsound crop-diversification programs
promoted by the World Bank as part of structural
adjustment, which also resulted in a shift away from
staple foods needed for food security to cash crops that
meet luxury requirements.
India's new Prime
Minister Manmohan Singh, soon after taking office,
toured Andhra Pradesh, where he announced release of
cash payments to farming families deprived of
breadwinners by the suicides.
As with other
developing countries that have gone in for structural
adjustment programs, India has been steadily dismantling
state support for food procurement, withdrawing support
to farmers and relaxing land ceilings to enable
corporations to move into agriculture.
In
contrast with farmers' bodies, India's trade and
industry chambers have welcomed the WTO framework. "It
is satisfying to see that a number of our concerns have
been addressed and reflected in the deal," said a
statement from the Federation of Indian Chambers of
Commerce and Industry.
The Confederation of
Indian Industries said it particularly welcomed
increased market access in non-agricultural items and
according to its president, S K Munjal, the framework
provided a "good basis for further negotiations".
