People's Democracy

(Weekly Organ of the Communist Party of India (Marxist)


No. 32

August 08, 2010

Kisan Sabhas Organise Round Table on FTAs


ON July 29, the All India Kisan Sabha (4 Ashoka Road), All India Kisan Sabha (4 Windsor Place), Agragami Kisan Sabha and Samyukta Kisan Sabha jointly organised at Delhi a National Round Table on the issue of free trade agreements (FTA) with European Union and Israel, and their impact on Indian agriculture. The Round Table began with the AIKS (4 Windsor Place) general secretary Atul Kumar Anjaan introducing the subject. AIKS (4 Ashoka Road) president S Ramachandran Pillai placed the resolution.


Introducing the issue, Atul Anjaan questioned the rationale for the utter secrecy in which the FTA negotiations are going on and asked the government to make the texts under negotiation public. S Ramachandran Pillai stressed that the FTAs are being used as an alternative mode to push forward the agenda of free trade more aggressively in the context of the breakdown of the WTO negotiations. The EU FTA will seriously compromise the livelihoods of the peasantry, workers and rural poor as well as public health, he said, also stressing that the dairy sector and millions of dairy farmers would be adversely affected by the Indo-EU FTA. He demanded a White Paper on WTO and its impact on the peasantry, and said that no FTA should be signed without approval of the parliament and state governments.


West Bengal agriculture minister Naren Dey spoke on behalf of the Agragami Kisan Sabha while N Chandrashekharan Nair spoke on behalf of the Samyukts Kisan Sabha and seconded the resolution. The Round Table was also addressed by Dr Krishnabir Choudhary (president, Bharatiya Krishak Samaj), Afsar Jafri (Focus on the Global South), CPI(M) MP Saidul Haque, CPI MP Prabodh Panda, and Prasenjit Bose (convenor, Research Unit of the CPI-M), among others. The AIKS (4 Ashoka Road) general secretary K Varadha Rajan and AIKS (4 Windsor Place) president C K Chandrapan presided over the Round Table.


More than a hundred delegates from different states attended the Round Table and many of them placed their views. After the discussions, the resolution was unanimously adopted. It was also decided that a delegation of the different organisations would present the resolution to the prime minister, the agriculture minister and the commerce minister, and also petition the parliament. The Round Table decided to intensify the struggle against the arbitrary and unilateral signing of FTAs while disregarding the parliament and the states.


Below we reproduce the text of the resolution which the Round Table adopted.




IN the backdrop of the agrarian crisis and the global economic crisis, this Round Table expresses serious concern at the manner in which the government is entering into free trade agreements. This will only lead to a further intensification of the agrarian crisis and its implications for the peasantry, the working class as well as the poor could be disastrous. The breakdown of the Doha Round of WTO negotiations has caused a stalemate which has not been overcome despite various efforts. The immediate reason for the breakdown was the inability of the EU and the USA to arrive at any agreement on the controversial issues, particularly on agricultural subsidies. In the context of the breakdown of the Doha Round of WTO negotiations, a devious alternative very much entrenched within the Free Trade Paradigm has emerged: a myriad of free trade agreements. In the backdrop of the global financial crisis, the developed capitalist countries in the EU and USA are cautious and also want to pass on the burden of the crisis to countries like ours. Developed capitalist countries are resorting more and more to Bilateral Agreements with individual developing countries to push forth the agenda of free trade. Bilateral free trade agreements could also serve to break the possibility of any united stand by developing countries in multilateral forums like the WTO. Not merely the developed capitalist countries but also the ruling classes in countries like India are enthusiastically taking to the idea. The urge of the Indian ruling classes to have a share in the global market and their drive to earn profits is sought to be addressed through the FTA route. The FTAs are different from the bilateral trade agreements that were being entered into earlier. The scope of FTAs is many times more than such agreements and covers the entire gamut of issues ranging from goods and services to investment and government procurement. The difference between the FTAs and the earlier trade talks is that while the multilateral talks under WTO were relatively open with texts in the public domain, the FTA talks are shrouded in secrecy. The Congress-led UPA government has also kept the parliament and state governments in the dark about the actual content of these FTAs. Now the government is finalising an FTA with the European Union, and FTAs with Israel and Japan are among the 56 FTAs in the pipeline. The numerous FTAs in the pipeline reflect a policy shift by the current government and the indiscriminate signing of FTAs under the veil of secrecy raises some serious concerns.





Agriculture is a very small component of the total trade between EU and India at present. India ranks around 12th in EU list of top trading partners in agriculture. On the export side, however, India ranks even lower. Of total EU agricultural exports to the world, India ranked 41st in 2007. The main reason for such ranking was primarily the mismatch of product categories. EU imports primarily edible fruits nuts, oil seeds and oleaginous fruits, coffee, tea, spices and other such tropical items which India exports. However, EU exports products like beverages, spirits and vinegar, dairy products, eggs natural honey, tobacco and products, meats etc which do not feature in the top imported agricultural commodities of India. In agriculture, EU is a net importer of raw products; tropical products, oilseeds, fruits and vegetables form the bulk of it. However, in processed agricultural products, EU is a net exporter with a total surplus of Euro 205 Billion in 2007. India has been exporting products like basmati rice, processed fruits and vegetables, floriculture, jaggery and confectionary etc to EU. In terms of imports from EU, wheat has in recent times featured high in the list, given India had to import wheat in 2006-07 due to domestic shortage. The EU is very keen on the FTA with India because it wants to have a major share of the Indian market for the above mentioned products and processed food products. EU seeks to force India into exporting raw materials and importing processed agricultural and food items post FTA. EU will try to push its top export products like dairy, processed coffee and tea and animal meat products, which do not feature in the top items imported by India.


The main thrust of the EU-India FTA, from the EU’s point of view, is to raise the market share of EU primary commodity exports to India as it is one of the largest and fastest growing markets in the world. Their effort is to find an ever-expanding market for their subsidised wheat and dairy products. India will not stand to benefit much because the EU are signing FTAs with many other developing countries and whatever advantage India has presently will be short-term and we will have to compete with tropical agricultural goods from these countries which will also flood the EU market. What then is the urgency that is propelling the Indian ruling classes to sign the FTA? They are eyeing the possibilities which the services sector could receive and the opening of investment opportunities for the Indian monopoly houses. They hope that this will promote the interests of the Indian big monopolies to get markets for their goods and services as well as investment opportunities. In this pursuit, they are however sacrificing the interests of the peasantry, workers, the poor and seriously compromising their livelihoods.




The India-EU FTA envisages a lowering of Indian tariffs to zero or near zero levels for 90 per cent of the agricultural products, while the huge agricultural subsidies enjoyed by the farmers in EU countries remains unaltered. This will ensure that EU can still continue to dump subsidized farm products in the Indian market. Indian farmers who are not having any such support cannot compete with the EU farmers. Tariff barriers used by India to protect its industry and agriculture are being dismantled even as the EU uses non-tariff barriers such as engineering and phyto-sanitary standards and also heavy subsidies, particularly in agriculture. Tariff negotiations at the WTO were on bound rates (maximum applicable rates), which is different from actual rates imposed. EU average bound agricultural tariff rates are very low (15.9 per cent in 2009) compared to India (114.2 per cent in 2009). The FTA commitments to bring tariff rates to zero or near-zero for 90 per cent of products means that India stands to face massive protection loss, much more than EU. Already 29.9 per cent of India’s agricultural exports to EU are already duty free while the rest face low EU tariffs. So India’s gain in agricultural exports will hardly increase, as compared to EU’s exports which will see a quantum jump.




The EU has been aggressively arguing for the opening up of the dairy sector in India by claiming that the taxes levied by India on imported food products were unrealistically high. Europe's dairy companies have identified the high tariffs as the main obstacle to expanding their commercial ties with India. Dairy Sector in India is estimated to employ 90 million people a majority of whom are women. A 2009 study by the Centre for Trade and Development, which monitors economic issues affecting South Asia, found that women would bear the brunt of any moves to expose India's dairy sector to grossly unequal competition from European imports. Women are estimated as comprising 75 million of the employees in dairy sector. Dairy sector is of crucial importance to small and marginal farmers as well as the landless poor and a significant source of income for millions of families. The very existence of the vibrant network of cooperative milk federations and women’s groups will be under threat.





On Intellectual Property, the EU is demanding TRIPS + provisions and re-writing Indian patent and copyright laws. TRIPS+ commitments on Intellectual Property Rights (IPR) would severely affect India’s ability to provide access to affordable medicines, to protect farmers’ rights to seeds and to uphold access to knowledge, thus undermining people’s livelihoods and achievements in healthcare, agriculture, and education and research. EU and Japan wants the extension of patent protection by five years and more barriers for generic manufacturers using patent linkage and data exclusivity. Data Exclusivity notably was not mandatory under WTO. All these measures are attempts to extend the sphere of patents and retain their monopoly well past the normal time period of 22 years granted under TRIPS. If agreed upon, this will increase costs and delay the process of bringing generic drugs into the market as well as perpetuate the monopoly of few pharmaceutical giants. The EU also seeks that India brand as “counterfeit” all its pharmaceutical exports to other countries through EU territory if they are not in conformity with EU’s patent laws. What goes on unnoticed by many is the fact that preceding the FTAs there is an unusual hurry to bring about legislations that would be FTA compliant. A careful scrutiny of most of the recent decisions and Acts proposed including the Seed Bill, Pesticide Management Bill, Nutrient Based Subsidy Regime in Fertilisers and Protection and Utilisation of Public Funded Intellectual Property (PUPFIP) Bill 2008 to name a few clearly indicate such a tendency. The PUPFIP Bill allows the plant varieties developed through public funds would be protected under intellectual property rights. Both EU and Japan are said to be pressing for India to join the International Union for the Protection of New Varieties of Plants-1991 (UPOV). This will seriously compromise the right of the peasantry to grow, sow, re-sow, save, use, exchange, share or sell their farm seeds and planting material. The UPOV goes far beyond even what is required by TRIPS. Data Exclusivity for Agrochemical Industry, provided by the Pesticide Management Bill, also clearly seems to be aimed to make Indian laws compatible to EU-FTA. Regulations on government purchases as well as the opening up of India to waste dumping at low or zero tariffs are other crucial concerns emanating from these FTAs.





The India-EU FTA envisages automatic extension of MFN status to the EU, implying that a favourable treatment by India to any other country on matters covered under the FTA must be automatically replicated in trade with EU. However, India which enjoyed ‘Special and Differential Treatment’ under the multilateral system, will cease to enjoy it as the EU FTA calls for full reciprocity. This must be seen in contrast with India’s position in the WTO which was strongly opposed to providing unbridled access to Indian markets by reducing tariffs to the lowest possible. India had along with other developing countries had unitedly ensured the institution of ‘Special and Differential Treatment’ especially in the context of the Non- Agricultural Market Access (NAMA) negotiations where developed countries called for such drastic cuts in tariffs. This seriously compromises India’s interests and only furthers the monopoly interests of the EU MNCs.





The EU FTA has brought back the focus on government procurement, investment and competition which were together known as ‘Singapore Issues’ in the WTO negotiations. WTO had removed these issues from ongoing negotiations due to opposition from developing countries with India playing a significant role. The liberalisation of services markets will seriously undermine the capability of elected bodies to develop and regulate strong public services. The commercialisation of these services will render essential services inaccessible for poor people. The global economic crisis has exposed the risks of increased financial liberalisation and deregulation of financial services. In such circumstances while governments across the world are recognising the need for closer regulation of this sector any move to further liberalise is irrational and against our interests. Allowing opportunity to MNCs for effective competition in local market will adversely affect Indian farmers and small entrepreneurs. The scope of government’s intervention for building domestic firms, providing jobs and fostering domestic value-addition will be greatly reduced by further liberalisation of investment while simultaneously it increases the rights of investors without corresponding responsibilities to fulfil the social and environmental requirements. It also provides for the prohibition of capital controls which is an important tool for ensuring macro-economic stability during financial crises. With the liberalisation of its services and investment, India may have to privatise some essential sectors for development such as environment, health and education services. EU is seeking opening up of government procurement at the central, state and local levels, including public utilities of goods and services. This can undermine the scope for governments to address poverty and inequality by directing government spending to small and medium enterprises (SMEs) and marginalised groups as well as the scope to use government procurement to provide critical support for domestic firms during times of economic recession.


The urgency with which the UPA government is carrying forward its negotiations for an FTA with Israel which is guilty of crimes against humanity is condemnable. Israel will tend to benefit as a big exporter of processed food, chemical fertilisers, other agro-chemicals and agricultural implements. In the context of decontrol of fertiliser prices, the farmers are going to face extreme hardship even as MNCs based in Israel and other countries will rake in huge profits at their expense. Our light industries will also be adversely affected. It is clear that the FTAs with EU, Israel and Japan are going to adversely affect the livelihoods of people and will put a question mark on employment generation as well as poverty alleviation. Food security will be undermined, public health will be a casualty and the poor will find it impossible to access quality medicines for treating major diseases. Indian farmers have been hit hard by the earlier FTAs and we have seen how the plantation sector, oilseeds sector, textile industry, light manufacturing industry and fisheries have been facing their adverse implications. Cheap imports of tea, coffee, spices, fish products and palm oil have led to drastic fall in domestic production and destruction of livelihoods. Farmers’ suicides have been high in regions growing some of these crops. There have been widespread protests against the India-ASEAN FTA in different parts of the country. Despite this, the government is carrying forward its agenda of trade liberalisation compromising our interests. This National Round Table calls upon the peasants, workers, the poor and middle classes to unite for intensifying struggles against such FTAs and resolves to oppose any move that will compromise the interests of the country and its people.


We demand:


A White Paper on WTO and its Impact on Indian Peasantry.


No FTA should be signed without the approval of the Parliament and State Governments.

Immediate release of the negotiating texts in the public domain.


Widespread consultations with State Governments, Farmers’ representatives, Experts and Scientists.


Strengthen Trade Barriers and Provisions that Protect Indian Agriculture, Dairy and Public Health Concerns.