India is now saddled with food surplus in 2008. Apart from a record production of rice at 96.4 million tonne (MT), wheat at 78.4 MT, coarse cereals at 40.7 MT, pulses at 15.1 MT, oilseeds at 28.8 MT and cotton at 25.8 million bales, the buffer stock with the government has marked a phenomenal increase. Rice stock has increased to 28.5 MT and that of wheat to 22.6 MT.

This situation has created a problem of disposal of the plenty. A part of the stock can be offloaded for distributing in the form of subsidised grains to the poor under public distribution system (PDS) and other welfare and employment schemes of the government. Yet there would remain a substantial surplus to rot in the godowns.

Following the global financial meltdown and the developed nations coming under recession, the commodity prices have nosedived.

Commodity prices had reached at its peak in the first half of 2008, primarily due to the extensive bio-fuel programme across the globe which resulted in food crops to be used for fuel and fuel crops to be grown displacing food crops. This caused the food prices to move in tandem with the rising prices of fossil oil. The tragedy is that the rise in food prices occurred after harvest to benefit traders in spot market and players in the commodity exchanges and not the farmers. Now the food prices are seen climbing down just before the harvest.

This is the time when the world leaders should try to rescue the farmers in the developing countries. But sadly, their approach seems to be different. The developed countries, which are in recession, are more interested that the developing countries open up their markets for their goods. The draft released by the WTO on December 6, 2008 for negotiations in agriculture is heavily tilted in favour of the developed nations.

The draft allows developed nations to have many flexibilities to protect their agriculture through heavy subsidies, including creation of a new Blue Box, fixing of overall trade distorting support bound levels above the applied and planned levels and with no caps on Green Box subsidies. The heavy subsidies given by the developed countries depress global prices to the disadvantage of the farmers in the Third World.

The developed countries have also been given the option to protect their agriculture through a sizeable number of sensitive products, without any trade value constraints. The draft has ignored the demand of the developing countries led by G-33 for self designation of special products (SPs) to the extent of 20% of the tariff lines. G-33 had also proposed a two-tier approach – one with zero cut in tariff and the other with average 12% cut in tariff.

The draft of December 6, however, has proposed a single tier approach in which if a country chooses 5% of tariff lines to have zero cut, the other 7% of tariff lines have to be cut by 19% on an average with a view to meet the overall cut of 11% for the 12% of tariff lines for the designated SPs.

The special safeguard mechanism (SSM) for the developing countries is complex and difficult to apply, while the special safeguard (SSG) for developed nations remain simple and operative. The draft has also proposed a large cut in farm tariffs by developing countries in the range of 36% to 46.7% as against the Uruguay Pound’s prescription for and average cut of 24%.

India and the developing nations, therefore, need to fight for justice in the interests of their farmers in 2009.