Hero or villain?

R Srinivasan | Updated on July 30, 2014 Published on July 30, 2014

India’s refusal to back down on food security is justified

Rogue state or rebel hero? The reactions to India’s refusal to buckle to pressure from the US and other advanced economies and sign the Trade Facilitation Agreement without getting clarity on how its food security programme will be treated, have been on these lines.

India says it cannot sacrifice the food security of millions of poor at the altar of development. Developed nations have called it a monumental blunder, which will put nothing less than the future of world trade itself, and the billions of dollars and millions of jobs that go with it, at risk.

That, however, is hyperbole. The gains from reaching a new World Trade Agreement (WTA) — of which the Trade Facilitation Agreement was a part — are quite overstated, and a bulk lot of the potential gains will anyway go to developed nations. And, with agreement on a WTA having been stalled for over a decade, the world has already developed alternative solutions. There are almost 500 bilateral and pluri-lateral trade deals already in place or under advanced negotiation. World trade as we know it, will be alive and well, with or without a WTA.

Neither is India an isolated black sheep. India’s stance — that any new deal must take into account the needs of the poorest countries — is supported by the G33 group of least developed countries (now 46 nations), as well as emerging economies like South Africa, Brazil and Argentina.

The US argument is that paying higher than market support prices for grain, and stockpiling rice and wheat which could be dumped in global markets, is tantamount to illegal subsidy and trade distortion. In reality, agri-surplus nations like the US and the EU subsidise their farmers far more than India does. The so called ‘market prices’ they use as a benchmark for India’s agricultural support prices are based on 1986-88 prices stipulated in the last Agreement on Agriculture. The G33 have been asking for this to be reviewed since 2006, to no avail.

Besides, India has also argued that the method of ensuring food security to its population is its sovereign right to choose. Logically and morally, this is the right stand. If India needs to suffer a few brickbats for doing so, so be it.

Associate Editor

Published on July 30, 2014

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