The Need for WTO Reform

Recently, farmers in Punjab were blocking roads and trains. Even the Chief Minister joined the farmers' protests because the Centre had failed to announce the Minimum Support Price (MSP) for paddy and, finally, when it did, the MSP was maintained at the same level this year as last year, Rs.530 a quintal, even though the costs of production have increased.

The farmers are demanding Rs.760 a quintal. MSP in agriculture is equivalent to minimum wages in other sectors. Without a minimum sustenance, which covers costs of production, farmers — our "annadatas", our primary producers — cannot survive. And the destruction of their livelihood security is the destruction of the nation's food security. The rise in MSP is a direct result of the rise in costs of production, which in turn is related to non-sustainable high external input industrial agriculture and unfair and unjust trade liberalisation rules of WTO and conditionalities of the World Bank/International Monetary Fund.

The costs of production are increasing because the seed sector has been opened up to MNCs who sell costly, non-renewable, unreliable seeds to farmers. The case of Monsanto's Bt. Cotton is a clear example of how farmers are being burdened with unnecessary costs and risks; new seed technologies such as hybrids and genetically engineered seeds need costly chemicals such as pesticides and herbicides; new IPR regimes which add to the costs of farming through royalty payments and technology fees; privatisation of energy and water which is leading to high costs of irrigation.

While costs are rising, farmers' incomes are collapsing. The fall in prices are directly related to the removal of Quantitative Restrictions (QRs) under the WTO regime which allows artificially cheap commodities to enter domestic markets and destroy farmers livelihoods and incomes; high export subsidies which allow prices to be lowered artificially below costs of production and transport; decoupling of costs of production and prices; monopoly control of a handful of grain trading giants over global trade in food; absence of anti-dumping and monopoly restricting rules in global trade in agriculture.

The most urgent task in bringing justice and fairness in trade rules for protecting the survival of Third World peasants, while defending the food rights of the poor is to lower costs of production and prevent unfair competition from artificially cheap subsidised imports by bringing back QRs and imposing tariff barriers. Sustainable agriculture/organic farming along with QRs are the only guarantee for livelihood security and food security in the Third World. While QRs are the key issue, and all movements of farmers across the world are calling for an re-introduction of QRs, there is a concerted attempt to take attention away from the QRs issue, which forces a change in WTO rules to issues which help reinforce WTO.

After Seattle, the diversion from QRs was created through "market access". The argument was that Third World countries need market access, and rich countries block it, and WTO is necessary to force developed countries to open up markets.

The "market access" argument for strengthening WTO did not win. Now the argument has shifted to "subsidies". WTO, it is now being argued, is needed to remove the rich country subsidies. This is false for a number of reasons:

The current rules of WTO have built in a "peace" clause for the rich countries up to 2005 (Art. 13 of the Agreement on Agriculture); The very categorisation of subsidies in the Agreement on Agriculture has made most subsidies in the United States and European Union "green box" and "blue box" subsidies, which are beyond those categorised as "trade distorting" and hence actionable under WTO; Even while the built in review of AoA is under way, starting 2001, the U.S. has further increased its farm subsidies up to $180 billion over the next few years; The recent U.S. decision on the textiles agreement shows clearly that the U.S. will not bend to WTO when it goes against domestic lobbies.

(The writer is Director, Research Foundation for Science, Technology and Ecology, New Delhi)