Grappling with food security
To battle corporate moneymakers, India must remain focused on providing subsidies to farmers
During the negotiations for the WTO Agreement on Agriculture in 2001, India had raised concerns over food security and flexibility that developing nations must ensure when it comes to providing subsidies to key farm inputs. Seventeen years have passed since then and countries like India are still awaiting a permanent solution on food security and public stock holding to arrive at WTO.
The global corporations believe that trade is the key to control resources and that the capital of resources is the key to control politics. Thus, the need was felt for such a forum of trade, where the governments of all the countries could be brought together and mechanisms could be created to facilitate the easy entry of powerful capitalist groups into any country, prevent any significant control on their activities, and keep the duties and taxes on these mega-corporations low, thereby enabling them to accumulate profit without any restraint.
In a way, the WTO has evolved into an economic-commercial-strategic forum. Its aim has been to reduce the subsidies provided to the farmers and citizens for farming and food security, in order to ensure that the markets are freely able to decide the prices, priorities, and policies of resource utilisation. This has four major aspects.
First, according to the influential developed countries, the fixation of minimum support prices for agricultural products by the government, places a control on the prices of these products which, in turn, limits the profits of the big corporate houses. Second, the Government of India does not only fix a minimum support price but also buys wheat, rice, sugarcane, and now even pulses from the farmers. This protects the farmers from the clutches of such corporations and global traders. Third, the government not only buys agricultural products and food grains but also provides it to two-thirds of the population—840 million people—on subsidised rates, through the public distribution system. Due to this, the big corporations are deprived of potential customers and at the same time, poor people are also safeguarded against exploitative prices. This also ensures food security in those states where food grains are not produced in sufficient quantity.
It is to be mentioned here that the Indian Parliament had passed the National Food Security Act on September 10, 2013, with an objective of providing food and nutritional security by ensuring the access to adequate quantity of quality food at affordable prices. The Act provides for coverage of up to 75 per cent of the rural population and up to 50 per cent of the urban population, for receiving subsidised foodgrains, under the Targeted Public Distribution System (TPDS). The Act also has a special focus on providing nutritional support to women and children. Besides meals for pregnant women and lactating mothers during pregnancy and six months after childbirth, women will also be entitled to receive maternity benefit of not less than Rs 6,000. Children up to 14 years will be entitled to nutritious meals as per the prescribed nutritional standards.
Fourth, due to this policy, the government exercises control over agriculture which, in turn, prevents big corporations from assuming a central role in this regard. A provision has been made to ensure that the subsidies provided by the government cannot exceed 10 per cent of the gross agricultural production. There are talks about initiating actions, including trade sanctions, against countries where subsidies exceed this level.
On the one hand, India is still facing a huge burden of chronic hunger and childhood malnutrition: around 195 million people are living with daily hunger, 38.4 per cent children are stunted, 58.4 per cent children and 53 per cent women in the reproductive age group are anaemic. On the other hand, 333,000 farmers in India have committed suicide since the WTO was formed, as they are not protected in the local and global markets. They were affected by extreme weather conditions, non-remunerative prices and adverse effects of Green Revolution. In this context, the WTO is debating the issue of Green Box subsidies (subsidy must not distort trade, or at most cause minimal distortion), Blue Box (exemption from the general rule that all subsidies linked to production must be reduced or kept within defined minimal levels), and Amber Box (all domestic support measures considered to distort production and trade).
It is to be understood that the rules of the WTO were not geared to help agrarian economies, farmers, and consumers. For example, in the present debate of reduction in subsidies, the total US domestic support has increased from US$ 69.9 billion in 1995 to $132.5 billion in 2014.
The US mentions that 94 per cent of its total domestic support falls in the Green Box, whereas India and China have demanded the removal of farm subsidies by developed countries. They propose the elimination of the 'Amber Box' subsidies. If a consensus emerges against allegedly 'trade-distorting' subsidies at the WTO, then India will be forced to reduce the quantity of agricultural products it buys from the farmers. Also, the government won't be in a position to increase the minimum support prices in favour of the farmers because it would increase the overall level of subsidies. In fact, the government will be forced to increase the prices of cheap food grains distributed under the National Food Security Act.
Thus, the developed countries want India to stop buying food grains from the farmers while dismantling the public distribution system. Instead, the government should transfer a certain amount as 'direct cash transfer' to the beneficiaries of the National Food Security Act. People can use the cash to buy food grains or other necessities from the open markets. This will have an adverse impact on women, children and the elderly. In addition, this system will eliminate the government control on the prices of food grains. In India, the move towards dismantling the public distribution system to reduce the subsidies provided to the farmers under the food security act has already begun.
According to the information provided by the Ministry of Consumer Affairs, Food and Public Distribution in the Lok Sabha on July 25, 2017, all the ration shops in Chandigarh and Puducherry have been closed. These two union territories used to be allocated 91,584 tonnes of food grains for distribution among 857,000 consumers. This has been stopped from the year 2017-18 and replaced by direct cash transfers for people to use the 'cash' to buy goods of their choice from the open markets. If the central government stops buying food grains from the farmers for public storage and also stops distributing it through the public distribution system, then the food security of the country will come entirely under the clutches of corporate interests.
The wholesale price of gram in India in the year 2016 (second quarter) was Rs 5,599 per quintal, while the international price was Rs 5,185. The Indian price of maize was Rs 1,504, while the international price was Rs 1,145. Domestic price of lentil was Rs 6,690 per quintal, while its price was Rs 6,030 internationally. The price of mustard oil in India was Rs 8,340, while in the international market it was Rs 5,391. This difference of prices in the domestic and international markets is due to the impact of subsidy and protection provided by the government on the cost of production. However, agricultural subsidy in India is far less compared to the developed countries. For example, 31,80,000 people were engaged in agriculture in the US in 2015. The US government provided them with a subsidy of $25000 million. This amounts to Rs 51 million, on an average, to each of them. On the contrary, in 2014, Indian government provided on average a subsidy of Rs 27,100 to 9.05 crore farmers. This included subsidy for research, pest control, training, consultancy, marketing, infrastructure, government purchases, irrigation, fertilisers, and electricity. If the subsidy given to research, marketing and infrastructure is also added to this, then the farmers were provided with an assistance of $456 by the government.
Between the years 2011-12 and 2013-14, India reduced the subsidy on agriculture and food security by Rs 18,918 crore. In this scenario, how will the Indian farmer compete in the international market without any subsidy?
Under current circumstances, India needs to increase its domestic support basket and increase the Minimum Support Price substantially to include pulses and edible oil in the National Food Security Act. It needs to provide incentives to promote the production of millets, pulses and edible oil to ensure livelihood and food-nutrition security. In such a scenario, if any proposal similar to the "Peace Clause" is accepted, the situation will worsen. Ideally, agrarian economies should make a call to take food security out of the WTO negotiations. DOWN TO EARTH
(The author is Social researcher with Vikas Samvad Human Development Resource Organisation. The views expressed are strictly personal.)