Last week, negotiations among four key World Trade Organization (WTO) members—the US, the EU, India and Brazil—collapsed over American and European refusal to cut farm subsidies.
The massive support (subsidies) extended to farmers by the US and the EU helps them in “dumping” their agricultural produce in the world market, leading to a fall in their prices. This affects the livelihoods of farmers in developing countries who do not have access to such subsidies and cannot withstand this unequal competition.
For instance, dumping of cotton by the US—which gives nearly $3-4 billion (Rs12,300-16.400 crore) a year as subsidy to its 25,000 cotton growers—has adversely affected livelihood of 20 million cotton growers across Africa who receive no such subsidy. It is risks such as these that have made developing countries such as India wary of allowing market access.
Trade in agricultural commodities is a very sensitive subject—although it accounts for less than 10% of the world trade—as it is a political hot potato involving livelihoods of millions of people and wrong policies can make the government of the day hugely unpopular.
The US has been pressurizing India to increase market access to the US exports.
But, given that both the US and India are to face national elections in 2008 and 2009, respectively, no imminent concessions are likely.
Agriculture in our country is in the throes of a crisis. Farming is no longer a matter of choice for millions of the new generation of young farmers, but one of necessity. The new generation of young farmers are finding farming unremunerative, extremely taxing and replete with huge risks and uncertainties without concomitant rewards.
Unabated spate of suicides by farmers in many parts of the country and a completely indifferent and apathetic response from the Union and state governments has completely shattered the confidence of the farmers.
The unrest among farmers in the countryside has grave implications for the country’s food security. Think of a situation where farmers refuse to grow for others and just grow for themselves and switch to other occupations for their livelihood.
Isn’t the scenario too scary to even imagine?
No country has ever treated its farmers as shabbily as we have. The collective conscience of the country has not been aroused even after thousands of farmers have ended their lives in misery and penury.
Farmer woes and complaints are unending. They do not get quality seeds and pesticides. Power supply to agriculture is erratic and there are no major public investments in irrigation infrastructure, save in a couple of states. Institutional credit is inadequate and expensive.
When they have a good crop, they do not get remunerative prices and when their crops fail due to vagaries of nature, farmers across the country allege that crop insurance claims are more often than not paid.
In India, the Aggregate Measure of Support to agriculture is negative. Finance minister P. Chidamabaram describes this situation as a case of poor and rich farmers subsidizing people like you and me, whereas the widespread belief is that tax-paying people like you and me are subsidizing the farmers.
Alternatively, this can be described as a case of implicit taxation of agriculture, while we all believe that agricultural income is tax exempt. This misinformation makes people like you and me think that we are being benevolent to our farmers.
Today, all our political parties are anti-agriculture and industry-friendly. Steeped in corruption, all political parties and politicians collect loads of money from industrial houses—both domestic and foreign—and formulate policies to suit their needs. And, we grab their lands for various industrial projects such as the special economic zones and refuse to heed to any counsel, unless there are violent protests such as the one in Nandigram.
Farmers suffer, as they are not organized like the workers in the formal sector. See how employees of Indian Airlines could get the management on its knees by striking and disrupting work.
When farmers turn up on roads to protest in extremely helpless situations, do we handle them with such kid gloves? Rather, they are showered with bullets. No other country treats the farmers who feed it with such callousness and contempt.
The vast and ever-growing distance between urban and rural sectors is fuelling public anger in the countryside, leading many youngsters to leave unviable agriculture and migrate to cities. Unfavourable trade policies and “dumping” by developed countries can wreak further havoc on the fragile sector facing a multitude of pressures.
“Jai Kisan” was a slogan coined by former prime minister Lal Bahadur Sastri. It is a slogan that is as relevant today as ever. Else, the world’s second most populous country may have to pay a heavy price for its negligence of the key sector of the economy and face the ignominy of depending on foodgrain imports to feed its masses.
G.V.L. Narasimha Rao is a political analyst and managing director of Development & Research Services, a research and consulting firm. Your comments on this Monday column, which will alternate between the intersection of business and politics, and pure politics, are welcome at email@example.com