In a Convocation Address given on December 29, 2000 at the Kerala Agricultural University in Trissur, Professor M.S. Swaminathan characterised the World Trade Agreement of 1994 as "an unequal and unjust trade bargain" for Indian agriculture. Discussin g the grave implications especially for millions of small and marginal farmers in India, he came up with the innovative and important suggestion that India should press for a "Livelihood Box." Excerpts from the Convocation Address:
The World Trade Agreement of 1994 brought agriculture for the first time in world trade history within its policy framework. The principles and policies of the WTO are based on Ricardo's concept of comparative advantage. The four major elements of the Wo rld Trade Agreement in the field of agriculture are:
Market access Domestic support Export subsidies Trade-Related Intellectual Property Rights
The experience of the last six years has shown that the expected share of the markets of developed countries is yet to be realised. Market access has been limited both by tariff barriers and sanitary and phyto-sanitary measures. In contrast, our markets have been opened up. Quantitative restrictions on the import of agricultural products will have to be removed with effect from April 1, 2001. The extent of domestic support provided by India to farming families is far below the prescribed ceiling. We als o do not provide export subsidies. In contrast, total farm support increased by 8 per cent to $363 billion in 1998 in OECD (Organisation for Economic Cooperation and Development) countries.
The World Trade Agreement in Agriculture will be reviewed next year. Proposals for changes in the Agreement have to be sent by December 31, 2000. In the original Agreement, several exemptions from the calculation of domestic support were provided. The tw o major categories are "Green" and "Blue" Boxes. Article 6.1 of the Agreement on Agriculture lists eligible items for inclusion under Green Box subsidies. These include policies which provide services or benefits to agriculture or the rural community, st ockholding for food security, domestic food aid, investment subsidies and agricultural input subsidies for low income and resource poor families.
The Blue Box provision includes direct payments to farmers under production limiting programmes. For example, the United States operates an extensive land set aside scheme in order to achieve a proper match between production and projected market demand. This has helped to ensure steady and assured income to farmers. Unfortunately, our farm families are experiencing all the negative impacts of the Agreement, mostly due to our own inaction or lack of timely action.
Consciously or unconsciously, we entered into an unequal and unjust trade bargain in 1994. There is no use in looking back. It is clear that the industrialised nations have through mechanisms like the Green and Blue Boxes as well as through very high tar iff barriers (like Japan's 2,000 per cent in the case of rice) ensured that the hoped for enlarged market access to the agricultural commodities from developing countries does not materialise.
President (Bill) Clinton in his recent address at Warwick, United Kingdom, stressed the need to ensure that trade is carried out with a human face and that it becomes an instrument for poverty eradication. Seventy per cent of our population derive their livelihoods from crop and animal husbandry, forestry and agro-forestry, inland and marine fisheries and agro-processing and agri-business. Eighty per cent of our farmers belong to the small and marginal farmers category. Our post-harvest and sanitary and phyto-sanitary infrastructure is very poor and massive investments in this area will be essential if we are to ensure a level playing field in the field of external trade in agriculture.
Under such circumstances, we should press for a Livelihood Box, which permits us to impose quantitative restrictions on the import of agricultural commodities, where dispassionate analysis indicates that such imports will kill livelihood opportunities fo r small and marginal farmers and landless agricultural labour, as well as for those involved in small-scale agro-processing and agri-business activities.
The greatest challenge facing us today is the provision of jobs or livelihood opportunities to millions of women and men living below the poverty line. Food security in our country now is best expressed in terms of million person years of jobs, rather th an in million tonnes of foodgrains. The Government of India has over 45 million tonnes of wheat and rice in its godowns and yet over 250 million children, women and men will go to bed partially hungry tonight. Therefore, jobs/livelihoods for Indians shou ld be the bottom line in our trade negotiations. Interestingly, this is the position which the world's richest country, the United States, has adopted so far.
A Livelihood Box may be needed for the next 15 years (until 2015), by which time I hope we can improve the productivity of our agriculture and the adequacy of our post-harvest and agro-processing infrastructure.
