Farmers’ distress in India can be traced to the introduction of technology-led capital-intensive farming in the heyday of the Green Revolution. This situation aggravated with the advent of “economic liberalisation” and globalisation of trade...How did this situation arise? In the name of boosting production, Indian farmers were encouraged to shift towards mechanised farming, purchase “improved” varieties of seeds and use chemical fertilisers and pesticides. This, no doubt, increased production, but imposed considerable financial burden on farmers. Volatility in prices of agricultural products acerbated their distress... The WTO regime promotes technology-driven high-cost farming and encourages monopoly of corporate houses in the sector. This mainly serves to promote the interests of agri-business multinationals at the expense of small and marginal farmers of the developing countries. Keeping the interests of their agri-business in view, developed countries are stonewalling all efforts aimed at reducing agricultural subsidies.
Impact of liberalisation of agriculture imports is best illustrated by the experience in edible oils. The oil seeds sector in India has suffered a terrible blow on account of liberalisation of vegetable oil imports. During the last decade, world prices of edible oils have seen many ups and downs. Overall, imports of edible oils and oilseeds increased by 254% between 1995 and 2004 and by 77% between 2001 and 2004. Not only has this resulted in an annual outgo of $1,800 million in foreign exchange, oil seed growers, especially mustard growers of Rajasthan, are making distress sales.
India is already under pressure from many countries, developed and developing, for lowering tariffs on farm products. India needs to emphatically state that agreement on meaningful reduction in developed countries subsidies must precede commitments on lowering of tariffs by developing countries. Further, any lowering of tariffs by it would have to be subject to the requirements of alleviating poverty, promoting rural development, and safeguarding livelihood and food security that are central to its economic growth.
As regards tariff reduction, India should emphasise that developing country commitments must be proportionately lower than those of the developed countries and that special and differential treatment should be integral to all aspects of the negotiations. Special products and special safeguard mechanism, now being negotiated at the WTO, are inadequate to safeguard the livelihood of India’s farmers. These mechanisms would be extremely restrictive. In lieu of these new concepts, it is imperative that developing countries be given the option to apply quantitative restrictions on imports, whenever needed, to protect the livelihood of farmers. —The writer is executive chairman, Bharat Krishak Samaj
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