The Food Security Act (FSA) may be a welcome step for the country, but how does it really help the Indian farmer make a living The bill doesnt necessarily ensure their livelihood security especially when the agriculture sector doesnt remain a domestic issue and is linked with world agricultural trade negotiations guided by WTO.
What needs to be done to make the FSA succeed is to empower the farmers in a complete sense, including their livelihood security, their rural income and development. Indian farmers will possibly be most benefited if the issues of livelihood, food security and rural development are equally considered at the WTO level (however, this is already contentious) to ensure the security of their entitlements as citizens of the country. Therefore, the issue before the government is not only spending its entire energy, using its institutional mechanism, fuel and fertiliser subsidies, PDS and instituting other fiscal measures to operationalise FSA, but also, more importantly, negotiating at multilateral trade forums to ensure all securities for the farmers.
In fact, agriculture remains a bone of contention for WTO member-countries even today. A host of issues have already been discussed at great length in the ongoing Doha round of negotiations. But, there is no end in sight. What is preventing WTO members from striking a deal is disagreement between the advanced (led by the US) and the developing countries like India, China, Brazil, etc. The debate is on whether to address the economic and social security of the farmers of developing countries or focus on trade. Two-thirds of WTO members are developing countries whose food security, livelihood and rural income are critically dependent on agriculture. They have a defensive interest in agriculture and are not keen to open up the sector for world trade whereas the industrialised countries are pushing their agenda of tariff reduction and market liberalisation of the sector so that they are in a position to export their products to developing countries and establish their global competitiveness in agriculture. Huge domestic subsidies to their farm sector are further helping them sell their products at cheaper prices in the global market which the developing countries cant afford to do, as a result of which the latters competitiveness is globally diminished. Since industrialised countries like the USA and those in the EU are powerful and influence global trade negotiations, economic and social security of Indian farmers is largely
What the developing countries are proposing instead are certain measures that should help them protect their agriculture, earn the farmers their livelihood and boost rural income, and in some ways prepare them to remain unaffected by the onslaught of world competition as engineered by USA and EU. Two measures being proposed by developing countries are Special Safeguard Mechanisms (SSM) and identification of Special Products (SPs). SSM would help them to defend their triple concerns of food security, farmers livelihoods and rural development in the event of agricultural trade liberalisation. It would enable them to raise their tariffs above the bound rates in the event of a fall in price of the imported product or an increase in volume of the imported product, beyond certain levels. SSM, therefore, would be an effective instrument to provide contingent protection to poor farmers in developing countries from negative shocks from surges in imports. The other measure initiated by developing countries to prohibit agricultural import surge is the concept of Special Products (SPs). SPs are a set of products that directly concern their food security and farmers livelihoods, and therefore, should be subjected to no or low tariff reductions in the Doha programme.
Inclusion of such provisions, the developing countries feel, will allow them to address concerns of food security, livelihood and rural development as most of their agricultural products would be outside the ambit of trade liberalisation, and secondly, will help them increase food production. It would remain relevant to the current crisis in food prices as subsistence in food production will provide food security and the developing countries wont rely on imports when there is a global shortage or price increase.
This policy space will allow developing countries to maintain the minimum comfort level of local farmers achieving greater self-sufficiency in food production. Given the backdrop of increase in food prices, there is a need for effective and operational SSM and SPs. This will also provide developing countries with long-term instruments to enable local food production. Sustained food production will help the farmers to sell their extra produce at government procurement level or market price, thus enhancing their income and social development. The Indian government has a huge task ahead in ensuring these farmers securities when it negotiates at the ninth WTO Ministerial Conference at Bali during 3-6 December 2013. The success of food security bill for farmers will then be justified.
The author is with the Indian Institute of Foreign Trade,