Negotiating for food security

Published : Aug 04, 2001 00:00 IST

India should plan a long-term strategy to push its agriculture-related interests in the forthcoming international trade negotiations by making alliances. It should participate vigorously and competently in the negotiations.

THE Uruguay Round of the General Agreement on Tariffs and Trade (GATT) negotiations went rather badly for India. This happened because the Indian negotiating teams comprised solely of bureaucrats. They were ill-prepared and no experts were consulted either before or during the long-drawn-out (1986 to 1994) negotiations. India was unable to protect its interests in any sector, not in the traditionally important area of textiles where the country got clobbered, not even in the crucial and sensitive sectors of food and health.

In the Agreement on Agriculture (AoA), India has negotiated equally disastrously. India's efforts to protect agricultural products from imports were pegged foolishly on its adverse balance of payments (BOP) position. This is permissible under GATT. At the same time, India pursued an aggressive strategy to increase its foreign exchange reserves and to seek as much foreign direct investments as possible. Increasing foreign exchange reserves cancelled out the BOP vulnerability and India had to lift quantitative restrictions (Q.Rs) on imports. The European Union (E.U.), on the other hand, negotiated Q.Rs on agricultural produce of interest to it in the agriculture negotiations. So the E.U., which provides $ 365 billion as subsidy to agriculture, will continue to impose its Q.Rs but India has had to lift its restrictions.

Fortunately for India, the AoA is being reviewed. The negotiations will in all likelihood stretch out over a number of years, so India should plan a long-term strategy to push its interests, make alliances and participate vigorously, and what is more important, competently in the negotiations.

The first step of India's AoA strategy will have to be a determined mobilisation of pressure to get the E.U. and the United States to reduce substantially their domestic as well as export subsidies. This will not be easy but it is fundamental to reducing trade distortion. Of foremost concern to India and all developing countries seeking access to the markets of developed countries are the very high, clearly trade-distorting subsidies given by the E.U. and the U.S. Running into hundreds of billions of dollars annually, these subsidies given for domestic agricultural production and for agricultural exports, formally preclude any access to European and American markets. What is more, Indian produce cannot compete with the heavily subsidised American and European produce for Third World markets.

The other trade-distorting aspect of the agriculture policy of developed countries is the very high tariff they impose on some important traded products. This "dirty tariffication" ( a commonly used term referring to the excessively high tariffs imposed by the U.S. and the E.U.) has set tariffs as high as 390 per cent for certain products. In effect this tariffication has emerged as being far more protectionist than the non-tariff barriers of the earlier years. These tariffs will also have to be corrected if further negotiations on agriculture are to have any meaning for the developing countries.

The AoA, with its emphasis solely on commercial agriculture, completely ignores the vulnerability of most developing countries where agriculture is, more than being a commercial activity, a means of livelihood and most farmers fall within the small to marginal range. In addition to this, almost all developing countries have food security concerns. India must emphasise and insist that the AoA cannot be allowed to come in the way of domestic food demands. The AoA should not be allowed to impact on food production for domestic consumption and it should have mechanisms to protect small and household farmers who do not engage in commercial activity but produce for their own needs.

The notion that agriculture is a multifunctional activity, a concept floated by developed countries, suggests that apart from the production of food, agriculture has other functions, all equally important. These include maintaining traditional cultures, affording recreation and keeping a balance in the environment. The multifunctionality concept must be resolutely opposed by India. It should propose instead that for developing countries, by far the most crucial aspect of agriculture is the production of badly needed food. The Indian position must insist that agricultural activity is primarily intended to ensure food and nutrition to impoverished communities and that food security, rural employment and rural development through agricultural activity, will be the foundation on which India will negotiate the AoA. This central dogma must inform all the positions India takes in the AoA.

India has officially proposed a Food Security Box along the lines of the Green, Blue and Amber Boxes relating to subsidies in its submission to the AoA negotiations. The Food Security Box concept requires that measures for poverty alleviation, rural development and diversification of agriculture be exempt from reductions. The Indian submission has also asked for the continuation of the safeguards mechanism allowed under Article 5 of the AoA, to introduce Q.Rs in the event of import surges so as to protect domestic markets and domestic producers. These are good steps, but only if the negotiators will stand by this position when they go to Geneva.

Also associated with agriculture is an area where India has been traditionally weak and infamously tardy. This refers to the conditions set out by the agreement on sanitary and phytosanitary standards (SPS). SPS sets food standards so that food that is traded is safe for human consumption. SPS standards deal with the kind of chemicals, for example pesticide residues that are permissible in foods. The SPS standards will determine what concentrations, for example how many micrograms per kg of food, of a certain chemical residue are allowed. Although the SPS is an agreement separate from the AoA, it is treated in tandem with it and the SPS standards are used as reference points for the AoA. It is therefore very important for India to participate proactively in what is happening in the SPS negotiations.

Levels of residues, the chemicals considered safe or not, the extent of growth hormones allowed and other such aspects are sometimes fixed arbitrarily. Although it is no one's case that food standards should be lax, these standards should not be allowed to become protectionist weapons, as they so often do. A clear case of protectionism was witnessed when the E.U. banned American beef because of the very high levels of hormones found in the meat. When the case was taken to the WTO (World Trade Organisa-tion) dispute settlement board, the board ruled that the E.U. could not ban the high-hormone beef of the U.S. and would have to import it.

At the moment all food standards are being set in a body called Codex Alimentarius which is completely dominated by the developed countries. India should, together with other developing countries, press for regional centres to set standards for food. The developing countries should express their viewpoint and bring their concerns into the standard-setting process. The SPS is going to be a very important instrument for regulating food trade and should not be underestimated. The regional head of an international food agency was recently heard lamenting how shoddy and inadequate India's participation was in the SPS negotiations, and how this would go against India's interest in agriculture in the WTO.

Finally, another related but still nascent development that will relate to trade in agriculture is the question of setting up a Working Group on Biotechnology in the WTO. This issue is hanging fire but the developed countries, particularly the U.S., are pushing it strongly. The reason is quite simple. The Americans are sitting on stocks of genetically modified (GM) food that nobody wants. Consumer resistance is pushing GM foods off market shelves and countries are closing their doors to these foods. Even the official Indian policy is not to allow the import of GM foods. India should oppose the setting up of a Biotech Working Group because it has no benefits, only drawbacks from it. If such a working group indeed comes into being, countries like India with no tracing and monitoring facilities will become the dumping ground for GM and similar foods. That is surely the last thing India wants.

Dr. Suman Sahai is convener of the Gene Campaign based in New Delhi.

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