SYED SULTAN MOHIDDIN analyses the factors that are pushing Indian farmers to land alienation, debt traps and suicides, and suggests to the Manmohan Singh government to get agriculture out of the WTO negotiations.
Bundelkhand’s Shame. This was headline news on CNN IBN, a few days ago. It was the heartrending story of dozens of farmers in Bundelkhand (U.P) who “sold” their wives to pimps on Rs.10 non-judicial stamp papers. “Hunger and the desire to live a few more days…have driven us to do this shameful thing,” told a farmer to the news channel. The Hindu published a series of P. Sainath’s articles, which uncovered the farmers’ plight in rural India. The number of farmers who committed suicide between 1997 and 2007 stands at 1,82,936 as told by P. Sainath in his article “Neoliberal terrorism in India: The largest wave of suicides in history”.
It is a paradox that, while Swine flu, which is killing about two lives a day, has been sending shivers down the spines of the State machinery and public at large, not even a soul in the Union government has ever bothered to understand as to why in our country a farmer is taking his own life in every 30 minutes!
WTO IS THE ROOT CAUSE
New Delhi hosted a Ministerial meeting of WTO on September 3-4, which was attended by the Trade/Commerce ministers of 35 countries. The two-day meeting broadly agreed to conclude the Doha Round by 2010. Trade negotiations are scheduled to resume in Geneva on November 30 this year. At the talks held in Geneva in July last year, India had strongly opposed the agriculture subsidies offered by rich nations to their farmers which are leading to “dump” the cheap foreign grain into the developing nations and the LDCs (Least Developed Countries).
“I cannot put the livelihood of millions of our farmers to risk,” said Kamal Nath, before he boycotted the talks. However, India’s sudden softening of its stand now is a cause of concern, particularly at a time when the whole country is gripped with a drought-like situation.
A BRIEF HISTORY OF WTO
Towards the end of the World War II, when the victory of allied forces appeared certain, the U.S and the U.K convened a meeting of government representatives (which included India) at Bretton Woods, U.S., in 1944. It was decided to form three organisations on the global scale…the International Monitory Fund (IMF), the International Bank for Reconstruction and Development (IBRD) – which subsequently came to be known as World Bank and the International Trade Organisation (ITO). Of the three above, the first two took shape but the ITO was discarded because the U.S. was not willing to open up its trade policies. In its place, a legal structure called General Agreement on Tariffs and Trade (GATT) was set up. The purpose of GATT was to create an international trading environment by removing protectionist barriers in all the countries, like Tariffs and non-Tariff barriers (NTBs).
GATT conducted negotiations in several “rounds”. To begin with, 23 countries participated in the first “Geneva Round” in 1947, but as the time progressed 123 countries took part in the “Uruguay Round” (1986-1994). A variety of trade related issues was discussed in the Uruguay round, such as agriculture, textiles and garments, services, patents, Trade Related Intellectual Property Rights (TRIPS) etc. At the end of Uruguay round – GATT changed its name as World Trade Organisation (WTO).
The WTO’s headquarters is at Geneva, Switzerland. It has 153 members and 30 observers; many among them seeking membership. The WTO will hold Ministerial meetings every 2 years. It has a Director General (Pascal Lamy at present), who will be elected in the Ministerial Meetings. However, the WTO is clearly not standing up to the task of promoting multilateral trading system. The countries, which preached and practised capitalism, have monopolised it. As a result, the WTO has been functioning at the behest of the developed countries. It has become an instrument to maintain the corporate hegemony of the global north over the global south.
‘AOA’ – THE TRIGGER FOR DISASTER
The Agreement on Agriculture (AOA) was discussed in the Uruguay Round of WTO in the year 1994. The AOA stipulates that, all the conventional tariff and non-tariff barriers were to be replaced by “bound rates”. These bound rates, which were negotiated by the Indian government, have ranged between Zero per cent for primary products to 150 per cent for processed products and 300 per cent for edible oils. These are very low when compared to countries like Japan, which has imposed 1000 per cent duty on rice to protect its paddy farmers. In addition to this, the actual Customs Duty levied on various goods is further below the “bound tariff rates” which were agreed in AOA, giving more concessions to MNCs to enter our markets. For example, on almost all edible vegetables and root vegetables like potato, onion, cauliflower, carrot, onion, turnip, cucumber, mushrooms, beans and spinach; the bound rate of tariff was 100 per cent, while the Customs Duty is only 35 per cent. For tea and coffee the bound rate of duty was 150 per cent but the Customs Duty is only 76 per cent. This resulted in unprecedented “dumping” of agriculture produce into the country – which literally shattered small and marginal farmers across the country. Thus, AOA with its corporate-driven and capital-intensive model of agriculture has endangered the survival of millions of small peasants and rural agricultural labourers. Due to its impact a spate of suicides was seen in States like Andhra Pradesh and Maharashtra.
DECLINING DOMESTIC SUPPORT
The AOA says that the Aggregate Measure of Support (AMS) should not exceed 5% of total value of agriculture production in the case of developed countries and 10% in the case of developing countries. India does not need to reduce the subsidies, as its AMS had always been far less than 10%. However, under the dictates of World Bank, subsidies on water and power given to farmers are being decreased. Our farmers are being deprived of subsidies in agriculture inputs including seeds and fertilizers. The share of irrigation and flood control in the Central Plan Outlay for Agriculture and Allied activities is declining year after year. Deregulations such as freeing the trade of agricultural commodities from controls under the Essential Commodities Act, 1955 have been introduced.
PDS AND FCI DISMANTLED
Bowing to pressures from World Bank, the Targeted Public Distribution System (TPDS) was introduced in June 1997, in place of Public Distribution System (PDS). The new system drastically reduced the number of people entitled to it by drawing an unfair distinction between Below Poverty Line (BPL) and Above Poverty Line categories of the population. Further it reduced the entitlement of the poor from individual entitlement to family entitlement. Due to this, the supply of food grains under the PDS declined over the years.
Showing the reduced off-take of food grains under the PDS, the government proposed in 2001 for dismantling of Food Corporation of India (FCI). But the objective was to allow corporate bodies to enter the procurement and distribution sector. With the slow and steady dismantling of FCI, the institution of Minimum Support Price (MSP) has lost its significance, exposing the farmers to the volatility of global market.
MSP ALLOWED TO GOBY
The main purpose of the procurement policy followed by the government since many decades, by offering Minimum Support Price (MSP) to the farmers for their agriculture yield, has been to protect them from incurring a loss against their actual investment. However, successive governments at the Centre have succumbed to the dictates of WTO, which demanded least intervention by the State in agriculture. The non-procurement of produce is leaving the farmers in the lurch. They do not know as to what would happen to their investment and hard labour. Due to rising global prices of cotton from 1990 to 1996, thousands of small farmers in Andhra Pradesh and Vidharbha region of Maharashtra, switched from producing food crops to cotton, expecting high profits. The global prices started crashing down from the end of 1996, and by the year 2001, it was almost half the level it was in 1995. The government did not intervene to buy cotton from the farmers at a fair price. The result? Thousands of debt-ridden farmers committed suicide.
TIME TO INTROSPECT AND ACT
Ever since India got Independence, till the onset of globalisation in the early 1990s, the Indian agricultural policy was driven by the objective of self-sufficiency to production and food security. Policies included provision of price support, procurement and public distribution at subsidised prices, input subsidies including subsidised fertilizers, irrigation and electricity and credit facilities. But alas, with India’s integration in the WTO in 1995, these policies have taken the beating. The Indian government has removed quantitative restrictions (QRs) on more than 1500 agriculture products. The traditional “tariff barriers”, which were meant for protecting our farmers from the cheap import of commodities from other countries, are literally demolished. All these factors are pushing Indian farmers to land alienation, debt traps and suicides.
It is time, the UPA-II government should not only introspect but it should also act. In the WTO talks that are going to resume in November – the rich and powerful nations led by the U.S., will certainly try to coerce the developing nations including India – to conclude the unfinished agenda on agriculture. It is imprudent to believe that the negotiations in WTO will bring any benefit to Indian agriculture and the farmers. In the interest of protecting the 70 per cent of Indians whose bread and butter comes through agriculture, the Manmohan Singh government should demand to pull agriculture out of the WTO negotiations.