Friday, November 29, 2013

WTO - Protecting Profits Not People

 India’s ‘famine-avoidance’ strategy is to provide farmers with an assured price support for their produce, and  a food procurement system that provided for a guaranteed market and at the same time helped get food to the poor in the deficit regions through a network of ration shops. Developing countries must find some way to ensure their citizens' food and livelihood security. Many countries try to do so by introducing measures to make food affordable for low-income consumers or by encouraging domestic food production, particularly through supporting small farmers. The trouble is that such measures sometimes come up against existing World Trade Organisation (WTO) rules. Thus, India's recent law that seeks to provide food security to one of the largest undernourished populations in the world has been challenged by the US in the WTO

 “Forth-seven years after it was launched, India is being directed at the WTO to dismantle its food procurement system as well as withdrawing the price support for farmers or freezing it at a lower level of 10 percent as applicable under the Agreement on Agriculture will make farmers vulnerable to the vagaries of the market. In India, as per WTO calculations, farmers are getting 24 percent more minimum support price for paddy crop since the base period of 1986-1988

Numerous U.S. farm groups have written to U.S. Trade Representative Michael Froman as well as U.S. Agriculture Secretary Tom Vilsack objecting to price support programmes. Not finding anything wrong in legitimate domestic food aid programmes, 30 US farm commodity export groups have however expressed concern at the “price support programmes, which have more to do with boosting farm incomes and increasing production than feeding the poor. A few multinational agribusinesses have increased their domination of global trade and food distribution. Speculation in commodity futures markets is creating volatile price movements that do not reflect true changes in demand and supply.

U.S. farm subsidies are therefore unquestionable. These are considered to be non-trade-distorting, and are not even on the negotiating table. The U.S. has more than doubled its subsidy from 61 to 130 billion dollars between 1995 and 2010, while the EU’s subsidy of 90 billion euros in 1995 came down to 75 billion euros in 2002, but rose again to hover between 90-79 billion euros between 2006-2009.” According to the U.S.-based Environmental Working Group, the U.S. had paid a quarter of a trillion dollars in subsidy support between 1995 and 2009. These subsidies have not been reduced in the 2013 Farm Bill.

Moreover, the U.S. does not find its own 100 billion dollars in support for its various food aid programmes in 2012 as trade-distorting, but has problems with 20 billion dollars in support that India is expected to provide to feed its 830 million hungry people. Since Indian farmers do not receive any direct income support (as producers do in the U.S./EU), this move alone will destroy millions of livelihoods and force farmers to abandon agriculture and migrate to the cities. Already, with agriculture becoming economically unviable, close to 300,000 farmers have committed suicide in the past 15 years.

The meagre palliative that India offers 67% of its hungry population is not acceptable to those businesses who wish India to import its food.  Putting more income into the hands of Third World farmers is not acceptable, as it makes developing country agriculture economically viable and therefore deals a blow to U.S. agribusiness trade interests.

From Here

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