The Global Angle to the Farmer Protests

Context: Recently passed Farm laws can be exploited by developed countries using provisions of the faulty Agreement on Agriculture (AoA) of the World Trade Organisation (WTO) against developing countries like India.

Global Pressures on Indian Agriculture:

• Recreation of colonial times: Developing countries are import-dependent (in grains and dairy products), and export of crops produce which is now facilitated through contract farming law.
  • United States, Canada and the European Union (E.U.) cannot produce the tropical and sub-tropical crops in high demand and import these from developing countries at low prices.
  • E.g. In the 1990s, developing countries like Botswanan and Philippines paid the price with a rapid diversion of grain to ethanol production in the U.S. and the E.U.
• Faulty Agreement on Agriculture of WTO: on two grounds -
  • Use of the direct cash transfer: by developed countries permitted while price support measures by developing countries have been limited to only 10%.
    • While the U.S. uses only 1% of the budget, while India would require 50% of the central budget to provide support to all farmers.
  • Arbitrary and absurd computation rules: for calculating the price support of 10% on the reference prices of 198-88.
    • The U.S. claimed that India’s support (calculating on the 1986-88 average world prices) should have been at least five times lower than what it was in 2014.
    • However, the support prices in 2013-­14 at the prevailing exchange rate of ?60.5 per dollar were well below global prices, which means that actual support was negative.
• Focus on the green economy: by converting food grains into ethanol using low-cost imports from developing countries like India.
  • If permitted, this could lead to a scenario of price spikes and to urban distress as experienced earlier by developing countries forced into import dependence.

Implications:

• Food security is threatened: An attack on public stockholding and procurement will have an adverse effect on the food security of the nation which is already at risk due to -
  • Due to exclusion error in identifying below poverty line cardholders.
  • Weak demand due to unemployment caused by Demonetization followed by COVID-19.
  • Pressure from developed countries on public stocking of grain for ensuring food security.
  • Putting it to the global market as perceived by farm laws will further compromise food security in India.
• Increased debt for the farmers: Unfair trade practices in the global market by the developed nation through (green box) subsidies has plunged them into unrepayable debt and distress.
  • E.g. in one village in Punjab, there were as many as 59 widows of farmers forced into suicide.

Way forward:

• Use of the System of Rice Intensification: economizes water without reducing rice production.
• Use of Minimum Support Price system: of procurement to ensure the economic viability of farming and food security of the poor in India.
  • To support the farmers’ demands against the machinations of both local and global business elites.