Time India said no to unfair deal, say Indian CSOs

There was also powerful support for the Indian government's stand on food security at Bali from civil society organisations at home. Gopa Kumar explains.

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OVER 40 Indian civil society organisations, and prominent activists and individuals, in a joint letter have supported the Indian government's current stand at the WTO, and urged the government 'not to give up the long-term interest of the nation for hazy short-term promises' and not give in either to pressure from the developed countries.

'We urge you,' the signatories said in the open letter, 'to stand firm and reject a Peace Clause that does not guarantee a permanent solution to the issue of price support to poor farmers in the country's sovereign endeavour for securing food for all.'

'We urge you to ensure that there is a permanent solution to the food subsidy issue, [one] that enables India and other developing countries to purchase food from small producers for public stockholding, without this being counted as part of "trade distorting subsidies" which are to be disciplined by WTO.'

'Moreover,' they said, 'the method of calculating a "subsidy" has to change. The present WTO method requires the government to buy food items from farmers at the 1986-88 price, which is outdated and very low; any price that is higher is counted as a "subsidy", which is absurd and must be changed. Reference should be made instead to the present market price, not the 1986 price, the use of which results in developing countries being unfairly punished and being portrayed as over-subsidising their farmers.'

Any peace clause, the letter said, will be meaningful only if it will last until a satisfactory permanent solution is adopted. Moreover, the peace clause should be applicable not only to the Agreement on Agriculture (AoA) but also to the Agreement on Subsidies and Countervailing Measures and not be burdened with paralysing conditions. 'We also urge you to take a strategic position on trade facilitation (TF) that secures India's overall development needs and sovereign policy space.'

Widespread poverty and hunger

Despite its high growth rate over the past few years (except the last two), India still has widespread poverty, hunger and malnutrition. Of its 600 million who depend on agriculture, 80% are poor small farmers who are near subsistence. While official poverty estimates put poverty at 21.9%, the National Commission on Enterprises in the Unorganised Sector (2007) had found that 77% of Indians, or 836 million people, lived on less than IR20 ($0.31) per day, living in abject poverty. The NC Saxena Committee puts poverty at 50%. Whatever the numbers, it is undeniable that hundreds of millions live close to the poverty line under precarious conditions.

India is positioned at 136th place in the 2012 UN Human Development Index. According to the global Hunger Index 2013, India is ranked 63 out of 120 countries and languishes far behind other emerging economies or even its neighbours Bangladesh and Pakistan. The report also points out that the level of hunger in India is at 'alarming levels'.

By agreeing to extend the coverage of the recently enacted National Food Security Act (NFSA) to 75% and 50% of the rural and urban population, the government has acknowledged the dire condition and urgent food needs of a large majority of its population.

Under such unconscionable conditions, the strengthening of both production and consumption systems in a synchronised manner is essential in order to ensure food security in India and to meet the hunger challenges that face 67% of the Indian population today. This can only be done through a strong Public Distribution System (PDS) which procures food from farmers, most of them poor themselves, at a Minimum Support Price (MSP) which is fair and remunerative, and then distributes it at a subsidised issue price to poor consumers.

Both the price and consumption components of the subsidy are crucial for supporting India's food needs. But the lopsided WTO rules in the Agreement on Agriculture, while allowing unlimited subsidies by developed countries, bar developing countries from providing essential price support even to poor farmers and even when the objective is to use such procured food to mitigate hunger and malnutrition of their poor food consumers.

The anomaly in the subsidy rules of the AoA is by now well known and accepted by all.

In this scenario, the proposal by the G33 group of countries, led by India, demands such subsidies should be included under the Green Box and be allowed without any conditions. This could have addressed the structural inequity in the AoA to an extent and has the potential to guarantee the food security of 670 million hungry Indians and others in similar conditions across developing and least developed countries worldwide.

However, in spite of giving huge subsidies themselves, the developed countries have rejected most of the elements of the G33 proposal, and the WTO Director-General Roberto Azevedo has recently offered only a partial and inadequate peace clause which gives India and other developing countries looking to use above-limit food subsidies 'a temporary protection against legal action by other members under AoA'.

Interestingly the original demand by the G33 that a peace clause, even if discussed, must operate 'till a permanent solution is guaranteed', seems to have withered away in the current text and a peace clause that will expire in four years seems to be firmly established. A work programme is promised by the 11th Ministerial Conference but that does not equal a permanent solution nor does it allow the peace clause to operate till one is found. Moreover, the G33's proposal to extend this peace clause to other relevant agreements guiding subsidies, such as the Agreement on Subsidies and Countervailing Measures, has also fallen on deaf ears. Without that, India can still be dragged to dispute settlement. This is not all. The long list of onerous conditions imposed on this feeble offering has in fact made future disputes more likely. The proposal requires detailed information sharing by India on what is essentially domestic policy and limits the coverage to very few staple crops, tying India's hands in pursuing an independent and flexible food support policy.

So in essence, while a permanent solution is not guaranteed by the peace clause, what is guaranteed is permanent food insecurity where the government is likely to lose control over its food policy options.

Position on Bali

Under the circumstances, the Indian Cabinet on 28 November finally decided to accept the peace clause only if it guarantees a permanent solution and extends to the Agreement on Subsidies and Countervailing Measures. This is a welcome change from its earlier stance of accepting the peace clause offered by the WTO Director-General. Given India's food situation, there could not have been any other option.

Moreover, India's position vis-a-vis the trade facilitation agreement must be consistent with and subservient to its position on agriculture. India's major interest is not trade facilitation but safeguarding its policy space to ensure the right to development, food security and ensuring the basic well-being of its people.

The proposed trade facilitation agreement is again an instance of ignoring the needs and demands of developing countries during the current round of WTO talks. The developed countries have sought to promote import penetration through import facilitation, but remained unwilling to make binding commitments to help developing countries and LDCs with finance and technology so they can improve export facilitation, or in meeting the binding commitments they themselves seek. This is why, in spite of considerable push and shove by the US, developing countries have largely refused to budge.

Given that the trade facilitation agreement on the table is not pro-development, it makes no sense to accept it for the apology of a food security deal. In the 'give and take' format the trade enthusiasts espouse so much, India is perfectly within its right to 'give' only if it manages to 'take' control of its food security and its policy space to do so.

'Until that can be guaranteed it is not in India's best interest and the interests of its people, to say yes to the grossly unbalanced, unfair and unlikely deal at Bali. And as a developing country that is acting to protect the long term development objectives for its people, India can hardly be blamed for it. In fact it should be hailed for this decision. In fact, development goals set up by the global community as a whole will again fall short if our food and nutrition security issues, coupled with producers' livelihood issues are not addressed squarely.

'We, as members of Indian civil society, believe it is time India says NO to an unfair deal. The Indian Commerce Minister and his delegation when negotiating in Bali must not be weighed down by the propaganda of developed countries and neo-liberal media reports as deal breakers. By doing so, he will do his people and other developing and least developed countries a long lasting favour.'         

Gopa Kumar is a senior researcher with the Third World Network. This article is reproduced from the South-North Development Monitor (SUNS, No. 7709, 3 December 2013).

*Third World Resurgence No. 281/282, January/February 2014, pp 35-36