India needs a clearer strategy on WTO farm talks

Latest position paper on negotiations reflects delicate balancing act

Raghav Narsalay

Agriculture, which was one of the issues instrumental in scuttling the Seattle Ministerial Conference of the World Trade Organisation (WTO), still remains to be the most controversial issue at the WTO.

Reports emerging from Geneva tell us that the European Union, Japan and the United States are not ready to budge even an inch from the ‘substantial’ positions that they took at Seattle. Developing country missions keep on anxiously waiting for country papers from the missions of these developed countries at meetings of the Committee on Agriculture, but what they get in their lap is the same position galvanised by a different negotiating strategy. This deadlock is becoming more than a serious political issue for developing countries like India.

In this context it would be interesting to take a closer look at the positions taken by major players, including India, on agriculture after the Seattle Ministerial Conference.

The EU and US stance
The EU government is caught in the tension of trying to be more responsive to its people and the EU small farmers and is, therefore, trying hard to sell the concept of ‘multinationality’—internally as well as externally.
The EU is keen that countries agree to provide some special concessions to agricultural exports from the least developed countries. This offer is being made as the EU is aware that actualisation of such an offer would not make any difference to the competition in their domestic agricultural market.

What is more concerning is that while dangling this carrot before the least developed countries, the EU would end up extracting support from these countries on other crucial and sensitive issues that could be a part of a broader negotiating agenda during a possible new round of negotiations.

The US, in its recent proposal, has suggested that domestic support categories be collapsed into two categories, trade distorting and non-trade-distorting subsidies.

But it is their proposal on the ‘Green Box’ issues that needs to be studied more carefully. The US has suggested that the ‘Green Box’ be expanded to take into account non-trade concerns and ‘development objectives unique to developing and LDCs’ (Least Developed Countries).

They have proposed the addition of the following measures to the ‘Green Box’: (i) Farm income safety net and risk management tools; (ii) Environmental and natural resource protection; (iii) Rural development including programmes on rural infrastructure; (iv) Support being extended to provision of alternative technological and bio-based products.

Given the fact that many developing and poor countries are not in a position to even exhaust the limit provided by the Agreement on Agriculture with respect to the provision of aggregate measurement of support (AMS) due to financial constraints, it is clear that the only players that would be benefiting out of such an expansion of the ‘Green Box’ would be the EU, the US and other rich agricultural exporters.

Developing countries (excluding India)
Developing countries have been quite active in terms of pointing out huge inequities in the present agriculture agreement and have continued bringing up food security as the core issue.

Some other interesting proposals that have come from developing countries can be summarised as follows:
l Rather than insist on agricultural liberalisation for all developing countries in all products, developing countries should be able to use a positive list approach to declare which farm produces or sectors they would like to be disciplined under the provisions of the Agreement on Agriculture.

l Developing countries should be allowed the flexibility to re-evaluate and raise the tariff levels for products which are consumed locally. Particularly where it has been established that cheap imports are destroying or threatening domestic producers.

Where India stands
Since the collapse of the Seattle Ministerial Conference, India has been quite reticent with respect to taking positions on agriculture. This was quite unexpected for the developing countries who were looking forward to India to continue its support for the positions its championed on issues such as ‘self-reliance’, ‘food security’, ‘market plus dimensions pertaining to agriculture’ etc.

One of the possible reasons for this silence could be the growing nearness between the US and India on issues such as biotechnology and corporate agriculture. The growing interest of Indian corporates in biotech farming as against the oppositions being voiced by several farmer groups to the entry of corporates in farming through the foreign direct investment (FDI) route or otherwise, has put the government in a fix. One gets a feeling that the government is really taking time to decide on prioritising of interests.

The other possibility is that there is a strong difference within the coalition with respect to prioritising issues — whether food security should be given priority over exports or vice versa.

But from a strategic point of view, India should realise that by giving exports priority over food security concerns would only result in contradiction of its own positions taken before the Seattle Ministerial Conference. It could even possibly translate into loss of allies on several other key issues being discussed at the WTO platform.
Furthermore, prioritising exports over food security would not be politically palatable, internally, especially during a phase when the support prices being given to farmers on certain crops are at times higher than international prices.

India has tried to perform a balancing act in this regard while presenting its latest position paper on agriculture at the WTO on January 15, 2001.

It is interesting to note that the section of food security has been given precedence to sections that delve into domestic support, market access and export competition. More so, arguments presented on food security issues have been quite comprehensive to incorporate the food security concerns of net food importing countries as well as least developed countries.

Given the WTO dynamics, the issue is how long will India be able to cling to this position?

The writer is an economist with the Focus-India Programme, Mumbai