People's Democracy

STANDPOINT OF AIKS & AIAWU FOR THE PRE-HONG KONG MINISTERIAL MEETING

Do Not Give In To WTO Dictates

Following is the text of the joint paper presented by AIAWU joint secretary Suneet Chopra on behalf of All India Kisan Sabha (AIKS) and All India Agricultural Workers Union (AIAWU) at the ‘Pre-Hong Kong Ministerial Meeting Consultation on Agricultural Negotiations’. This consultation meeting, organised by the government of India, UNCTAD and DFID, took place in New Delhi on July 19-20 at Vigyan Bhavan. On behalf of AIKS, its general secretary K Varadarajan attended the meeting while Suneet Chopra represented AIAWU. S Malla Reddy of AP Rytu Sangham also participated.

THE Hong Kong ministerial meeting of the WTO is taking place at a time when we have considerable experience of its functioning. Far from ensuring a larger share in trade for developing countries we are seeing the reverse since 1980. The share of food and agriculture (in which developing countries have a better performance) in total merchandise trade fell from 17 per cent to 10 per cent between 1980 and 1997 (OECD 2000). The prices for individual commodities too have suffered declines from 1980-2000. Of, these coffee, sugar, and rice have all registered decreased ranging from 60.95 per cent for rice, to 64.5 per cent for coffee and 76.6 per cent for sugar. They are the hardest hit. Commodities whose prices have fallen between 25 per cent and 50 per cent are coconut oil (-44.3 per cent), cotton (-47.6 per cent) wheat (-45.2 per cent) and groundnut oil (-30.9 per cent). Tea has registered a fall too, but only of 7.5 per cent. From these figures it is evident that India has gained little but lost a lot from this process, especially as it is a large scale producer of sugar, cotton, rice and wheat. Therefore one can say with some certainty that the dreams of wide-open export markets for our products as a result of trade liberalisation were misplaced. This trend goes back to the 1930s so there is not much to warrant a belief that this is likely to change in the near future.

Given this state of affairs we can argue that we can expect to see further deterioration of the situation with cut-throat competition between primary producers of the South to try and access whatever they can of a South-South market already in the throes of not only over-production but also of having to counter excessive subsidies being provided to primary producers of the USA, EU and Japan that allow for their products to be dumped on the world market. The USA and EU account for half the exports of wheat, with export prices that are 46 per cent and 34 per cent below costs of production, respectively. The EU is the largest exporter of white sugar whose export price is 25 per cent of its cost of production. Agricultural subsidies account for 25 per cent of the output of the USA, 40 per cent in the EU and 60 per cent in Japan.

India must take stock of this as Indian agriculture, which supports 53.1 per cent of its population, is already facing a serious crisis. In 1991, agricultural produce provided for 35 per cent of the total GDP, which has come down to 24 per cent in 2004. The projected figure for 2006-07 is likely to be no more than 20.7 per cent. At the same time, those whose livelihood depends on agriculture have gone up from 181 million in 1991 to 234 million in 2001. Of these, the percentage of self-employed has declined from 61.95 per cent in 1987-88 to 60.9 per cent in 1993-94 and 57.77 per cent in 1999-2000, while hired workers have increased from 38.05 per cent to 39.85 per cent and 42.23 per cent in the same period, with casual labour rising from 34.89 per cent to 38.54 per cent and 40.89 per cent respectively.

This reflects not only a decline in the prices of agricultural commodities but also of the price per unit of labour in agriculture. Moreover, it reflects a decline of the quality of employment as well, from self-employment to casual labour. Agricultural production has taken on the character of subsistence and even distress production. Indian agriculture is badly in need of protection. This cannot be afforded by so called ‘rules of the game’, arbitrarily determined ‘green’ and ‘blue’ boxes or coefficient ‘B’ of the Swiss Formula, as the rules are rigged to favour the developed world already. In fact, the Agreement on Agriculture has shown itself to be no more than a mechanism for dumping cheap subsidised grain and food-stuffs from the USA and EU in the developing and least developed countries and destroying the lives and livelihood of millions and leading thousands of farmers to commit suicide.

In these circumstances, seeing the manner in which the joint USA-EU text was released just before Cancun on August 13, 2003, and its failure, the government of India should ensure that no further discussion should be encouraged on agriculture (which was specifically kept out of the GATT agreement till 1994) until the US, EU and Japan abandon attempts to dump their highly subsidised agricultural products on the world market that will bring the largely subsistence agriculture of developing countries to ruin without alternative avenues of employment being opened to those at the receiving end of these policies. 

We therefore demand that the government of India retain its position of not detailing issues like market access in agriculture unless developed countries undertake substantial reductions in tariff rates, apart from doing away with subsidies that have been fraudulently described as ‘non distorting.’ In our view, until headway is made on these lines, quantitative restrictions should be re-imposed to protect our agrarian base till a more equitable alternative emerges globally.

The ruin of agriculture in India is underlined by the threat to food security. The last year’s food production saw a decline of 8 per cent in Punjab, the ‘bread basket’ of India, of 7 per cent in Uttar Pradesh and Haryana and 40 per cent in Rajasthan. The grain production of 2004-05 in the country as a whole was six million tonnes less than the year before. Indeed, when we see these figures in relation to the fact that foodgrain production has consistently gone down from 72 per cent of all agricultural production in 1991 to only 64 per cent in 2004, we ought to appreciate what it means for the survival of a good 43 per cent of our citizens.

Today, the government’s foodgrain reserves have fallen from 64 million tonnes in 2000 to close on 15 million tonnes, three million tonnes less than the minimum required for the Public Distribution System to function effectively. It is no use to make excuses that the PDS fails to function as the offtake is low. It has been made low by a series of increases in price and a process of targeting that has virtually destroyed the system as well as increasing the relative cost of storage. When we see this in relation to the fact that our per capita availability of foodgrain has come down to 143 kg per year, a figure close to what was available at the time of the Bengal famine in the late forties of the last century, we know that any further progress along the paths successive governments at the centre have been treading will make the famines of Sub-Saharan Africa a reality in India as well. Nothing less than a universal PDS will do. So obviously we cannot subscribe to such disastrous policies being pursued. The procurement of grain at remunerative prices from farmers and its sale at affordable prices to the consumers ought not to be negotiable until our agricultural economy is able to cope with the competition of global market that is not rigged.

Even remunerative prices are not sufficient to ensure the survival of the small and marginal peasants who represent some 60 per cent of all holdings. They often have no surplus to sell so procurement alone does not solve their problems of production. They can only expand their productivity with fertilizer subsidies that allow them to access all the fertilizer they need at affordable prices. Here too, the Retention Price Scheme ought to be revived as it took into account the depreciation of Capital Related Charges, so that all companies producing fertilizer are treated equally. Coupons both in the case of fertilizers and the PDS will not be able to control undue advantage being taken of the poor by those able to buy out their rights. At the same time, government intervention by providing cheap electricity, water and seed is a basic requirement as part of the provision of an infrastructure for small farmers. So we cannot be expected to abide by conditions that apply to the landowning producers of agro-industries of the USA and EU.

Finally, the rights of individual farmers to experiment, produce, exchange or even sell seed must not be tampered with or we will destroy the relative advantages we can reap with thousands of years of experience of working in favourable conditions of enormous bio-diversity. So the Seed Act should be amended accordingly. The patent issue should be excluded from TRIPS entirely. The TRIPS has seriously undermined people’s food sovereignty. TRIPS has also facilitated a public health crisis in the form of HIV-AIDS that has drastically setback many parts of Asia as well as Africa, by putting corporate profits above public health concerns.

Finally, the free movement of commodities should be related with the free movement of labour as pernicious immigration laws are conducive to the evil and destructive practice of human trafficking.  The GATS Mode 4 (the movement of natural persons) despite claims to provide potential benefits to LDCs, carries the risk of permitting big business to control the movement of people and even traffic them. Thus, resulting in the trampling of the rights of migrant workers.

Though the current round of trade negotiations have been labelled the “Doha Development Round,” there is nothing in the Doha Agenda that promotes development.  The so-called “July Framework Agreement” that serves as the basis to conclude the current round is intensely anti-development. The framework on agriculture is intended to preserve or enlarge the heavy quantum of subsidies for agriculture in the North while demanding market access in the South through a new round of steep tariffs cuts, if not outright elimination of tariffs.

The framework for non-agricultural market access (NAMA) aims to radically bring down and bind industrial and manufacturing tariffs to allow TNC products to flood Southern markets. This would result in unemployment and contractualisation, as well as de-industrialisation. This would also mean the denial of developing and least developed countries to use trade policy as an instrument of industrialisation.  Simultaneously, it would also result in greater hardship for already suffering fisherfolk, whose livelihoods will be further eroded by NAMA’s proposed liberalisation of fisheries.

The major concerns of developing countries, such as industrial growth, the institutionalisation of Special and Differential Treatment and addressing problems associated with the high cost of implementing previous liberalisation commitments are all relegated to the backburner by the July Framework. This is also unacceptable to us.

Given the fact that they have nothing to gain but everything to lose by agreeing to the July Framework, the developing and least developed countries must refuse to make the latest concessions demanded by the big trading powers. Derailment of the sixth ministerial meeting will not mean an end of free trade to the developing and least developed countries. 

This would imply the expulsion of the WTO from the domains of agriculture and fisheries, services and intellectual property rights; the prevention of the WTO’s aim to de-industrialise the developing and least developed countries and make them captive markets for the TNCs; and the creation of a trade regime that genuinely promotes pro-people sustainable development.