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Resource centre on India's rural distress
 
 

For India, the fight at WTO will be about food security -Sachin Kumar Jain
-Down to Earth

India needs to find a permanent solution to the problem of public stock holding, as it is a matter of survival for hundreds of millions people

During the negotiations for WTO Agreement on Agriculture in 2001, India raised concerns over food security and flexibility that developing nations must have when it comes to providing subsidies to key farm inputs. Seventeen years have passed since then and countries like India are still waiting for a permanent solution on food security and public stock holding to arrive at the WTO. It is a matter of setting fundamental values of pro-people governance in a civilised society and giving supremacy to human rights values.  

The global corporations believe that trade is the key to control resources and the capital of resources is the key to control politics. Thus, the need for such a forum of trade was felt where the governments of all the countries could be brought together and such mechanisms could be created which could facilitate easy entry of powerful capitalist groups into any country, prevent any significant control on their activities, and keep the duties and taxes on these mega corporations low so that they are able to accumulate profit without any restraint.

Major objectives of WTO and India’s Food Security Act

In a way, the WTO has evolved into an economic-commercial-strategic forum. Its aim has been to reduce the subsidies provided to the farmers and citizens for farming and food security in order to ensure that the markets are freely able to decide the prices, priorities and policies of resource utilisation. There are four major aspects of this:

First, according to the influential developed countries, the fixation of minimum support prices for agricultural products by the government puts a control on the prices of these products which, in turn, limits the profits of the big corporate houses.

Second, the government of India does not only fix a minimum support price (which is anyway quite low and not profitable for the farmers) but also buys wheat, rice, sugarcane and now even pulses from the farmers. This protects the farmers from clutches of such corporations and global traders.

Third, the government not only buys agricultural products and food grains but also provides it to two-third of the population—840 million people on subsidised rates through public distribution system. Due to this, the big corporations are deprived of potential customers and at the same time, poor people are also safeguarded against exploitative prices. This also ensures food security in those states where food grains are not produced in sufficient quantity.

It is to be mentioned here that Indian Parliament passed National Food Security Act on September 10, 2013 with an objective of providing food and nutritional security by ensuring access to adequate quantity of quality food at affordable prices. The Act provides for coverage of up to 75 per cent of the rural population and up to 50 per cent of the urban population for receiving subsidised food grains under Targeted Public Distribution System (TPDS), thus covering about two-thirds of the population.

The Act also has a special focus on nutritional support to women and children. Besides meals to pregnant women and lactating mothers during pregnancy and six months after the child birth, such women will also be entitled to receive maternity benefit of not less than Rs 6,000. Children up to 14 years of age will be entitled to nutritious meals as per the prescribed nutritional standards.

Fourth, due to this policy, the government exercises control over agriculture which, in turn, prevents big corporations from assuming central role in this regard.

There is ongoing discussion in WTO that such ‘bad’ subsidies (which are termed as ‘market distorting subsidy’) should be minimised because they affect market operations that are geared towards profit of huge monopolistic corporations.

A provision has been made that subsidies provided by the government cannot exceed 10 per cent of gross agricultural production. There are talks aout taking actions, including trade sanctions, against countries where subsidies exceed this level.

On the one hand, India is still facing a huge burden of chronic hunger and childhood malnutrition: around 195 million people are living with daily hunger, 38.4 per cent children are stunted, 58.4 per cent children and 53 per cent women in the reproductive age group are anaemic. On the other hand, 333,000 farmers in India have committed suicide since WTO was formed, as they are not protected in the local and global market. They were affected by extreme weather conditions, non-remunerative prices and adverse effects of Green Revolution. In this context, WTO is debating the issue of Green Box subsidies (subsidy must not distort trade, or at most cause minimal distortion), Blue Box (exemption from the general rule that all subsidies linked to production must be reduced or kept within defined minimal levels) and Amber Box (all domestic support measures considered to distort production and trade). The total value of these measures must be reduced subsidies.

It is to be understood that the rules of WTO were not geared to help agrarian economies, farmers and consumers. For example, in the present debate of reduction in subsidies, total US domestic support as per the WTO notifications, has increased from US$69.9 billion in 1995 to $132.5 billion in 2014. The US mentions that 94 per cent of its total domestic support falls in Green Box, whereas India and China has demanded removal of farm subsidies by developed countries. They propose elimination of 'Amber Box' subsidies.

If a consensus emerges against allegedly ‘trade-distorting’ subsidies at the WTO, then India will be forced to reduce the quantity of agricultural products it buys from the farmers. Also, the government won’t be in a position to increase the minimum support prices in favour of farmers because it would increase the overall level of subsidies. In fact, the government will be forced to increase the prices of cheap food grains distributed under National Food Security Act.

Actually, the developed countries want India to stop buying food grains from the farmers and also to dismantle the public distribution system. Instead, the government should transfer a certain amount as ‘direct cash transfer’ to the beneficiaries of National Food Security Act. People can use the cash to buy food grains or other necessities from the open markets. This will have adverse impact on women, children and the elderly. In addition, this system will eliminate government control on prices of food grains.

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