WTO Director General Pascal Lamy seems to be a firm believer in “fear psychosis”‚ Knowing well that none of his shrewd trading skills have helped shift the focus of the ongoing negotiations from agriculture subsidies to market access, he is now trying to inculcate fear among the developing countries.
“Developing countries would lose if the Doha Development Round fails,” he warned African trade ministers last week at Arusha. “The US can increase its trade-distorting domestic support (TDS) by $5 billion, the EU by $25 billion and Japan by $5 billion.” What he forgot to tell them was the developing country agriculture in any case is doomed if the US $ 1 billion farm subsidies that the Organisation for Economic Cooperation and Development (OECD) pays to its agribusiness corporations and rich farmers are not entirely scrapped.
Fear psychosis is the latest strategy. Bribery and bait are the two other planks of the “negotiating” strategy that are being applied. Least developing countries are being provided with an “aid for trade” package, expected to be in the range of US $ 400 million, in the name of assistance to cope with adjustment costs, and also to provide necessary infrastructure. Besides, the promise of a “development package” contains duty and quota-free access for LDC products, preference erosion; some special and differential treatment proposals, and longer transition periods on TRIPS and investment measures.
All these allurements are not enough to minimise the devastating effect subsidised agriculture has had on the developing countries. If the last ten years of the WTO are any indication, a majority of the developing countries have now turned into net food importer, thereby negatively impacting food security and resulting in a massive loss of farm livelihoods. On the other hand, while the negotiations continue, the developed countries have managed to increase farm exports. Agricultural exports from the European Union, for instance, have gone up by 26 per cent. Every percentage point gained in exports adds $3 billion in export sales and $750 million to agricultural income.
For the developing countries, increase in agricultural imports means further marginalisation of the farming community. In India, agricultural imports have gone up by 300 per cent in the last ten years. While edible oil imports have increased by 398 per cent, cotton imports have multiplied by a whopping 13,153 per cent. Sugar, fruits and vegetables and spices are some other commodities that have poured in unchecked. For a country like India, importing food is like importing unemployment.
In such a depressing socio-economic scenario, what should India do? What strategies it needs to adopt at Hong Kong to ensure that the livelihoods of its 600 million farmers remain protected? Let me provide some action points:
– Agricultural subsidies in the developed countries need to be segregated under two categories: one which benefits small farmers and the remaining which goes to agri-business companies and the big farmers/landowners.
– Since less than 20 per cent of the US$ 1 billion farm subsidy a day benefits small farmers, the remaining 80 per cent subsidies need to be outrightly scrapped before proceeding any further on agriculture negotiations.
– Despite the pressure from the US/EU on providing more market access, India should refuse to even make a mention of market access till 80 per cent of the subsidies (as mentioned above) are not removed.
– Quantitative restrictions should not only be restored but linked to the removal of agricultural subsidies. QRs should be phased out in the same proportion as the removal of subsidies. If subsidies are removed by ten per cent by 2015, India should also promise a similar phase-out by the same year.
– July Framework 2004, which Pascal Lamy considers to be Œone step forward‚, is actually two steps backward. It allows developed countries a cushion to further increase its agricultural subsidies thereby negating the gains of the level of ambition achieved in the past ten years. The framework should therefore be reopened and renegotiated. It should not be allowed to be the foundation for any future recalibration.
– Agriculture should not be sacrificed for the sake of services. Despite the government‚s over-enthusiasm on opening of the service sector, the fact remains that it would benefit only a miniscule percentage of population. The future of 600 million farmers cannot be bartered for the sake a few thousand foreign employment visas.
– India should take the initiative to introduce a new issue: call for a multi-lateral agreement against hunger. Based on the right to food principal, the agreement should seek protection from any trade measure that adds to hunger in any country. This will be an opportunity to bring hunger into the centre-stage of trade for development. #