‘Produce & Perish’ – How A New Secret Deal Is A Threat To The Future Of India’s Agriculture


‘Produce & Perish’ – How A New Secret Deal Is A Threat To The Future Of India’s Agriculture

At a time when farmer unions are planning for a Jail Bharo protest from Aug 9 to Aug 15 seeking farm loan waiver and implementation of the Swaminathan Committee recommendation of providing 50 per cent profit over the cost of production, what they are not aware is that an international trade negotiations currently underway holds a much bigger threat to the future of Indian agriculture.

The damage caused by climatic change is not going to be the biggest worry that a farmer is likely to face in future. There is a still a bigger disaster would be a price crash after a bountiful harvest. Farmers know when the drought is approaching; they know what precautions to take when the heat spell extends for long. They remain prepared to face insect attacks and know how to minimise crop losses at times of heavy rains. But just imagine the severe blow that a farmer receives when he finds that after an abundant, the prices crash.

This is what I call as ‘Produce and perish’. Farmers produce a record harvest, only to suffer an unforeseen disaster.

After two years of back-to-back drought, the rain gods finally smiled. Expecting a normal crop season, farmers put in their labour hoping to partly offset the losses suffered in the past two years. A bountiful harvest would result in good prices for them, they thought. But the markets suddenly crashed. Prices of dal, tomato, potato, onion, sarson, and all other vegetables crashed forcing farmers to dump the produce on the highways at many a places. Farmers’ anger imploded into a massive protest that began from Maharashtra and Madhya Pradesh, eventually resulting in five farmers dying from police farming.

Also read: The Rs 1.4 Trillion Plan To Destroy India’s Agriculture

But there is more trouble brewing on the farm front. At a time when farmer unions are planning for a jail bharo protest from Aug 9 to Aug 15 seeking farm loan waiver and implementation of the Swaminathan Committee recommendation of providing 50 per cent profit over the cost of production, what they are not aware is that an international trade negotiations currently underway holds a much bigger threat to the future of Indian agriculture. In fact, as and when it comes into existence, it would allow unbridled imports of highly-subsidised agricultural commodities at zero duty thereby pushing small farmers to abandon agriculture.

Let’s examine what is at stake. Over the past few decades, especially after 1995 when the World Trade Organisation (WTO) came into existence, the effort has been to force the developing countries to remove trade barriers and import duties. What was attempted initially through the WTO was aggressively pushed under the bilateral Free Trade Agreements (FTAs) between two countries or a group of countries. While numerous studies have shown that India has hardly gained from the opening up of the domestic market, the damage done to agriculture has been enormous.

Sridhar R from Thanal, a voluntary society based in Thiruvanthapuram, explains how the FTA with ASEAN trading block has already hit the livelihoods of plantation growers in Kerala. “Seven years ago, we, as civil society and the Govt of Kerala, had predicted that reduction in import tariffs would impact Kerala seriously, especially in rubber, and spices.” He says that as per the prediction the imports have increased and prices have fallen. The Central Government, which went ahead and signed the deal, has done nothing whatsoever to compensate or support the farmers whose lives and livelihoods have been affected. However, Kerala is left to shoulder the burden of providing Rs 5 billion every year to compensate the rubber farmers for the price fall. Only about 30 per cent farmers get the compensation, with the rest of the community gradually moving out.

Also read: Is River Kaveri Turning Into A Desert?

As if this is not enough, a Regional Comprehensive Economic Partnership (RCEP) treaty, which concluded its latest round of negotiations at Hyderabad in July, is considering removing import duties on 92 per cent of the traded commodities. Still worse, the import duties that will be reduced to zero under the treaty cannot be raised later, a provision that even the WTO did not impose. In other words, the RCEP treaty, if India agrees to sign, would open up the Indian market for zero import duty for all times to come. It will take away the right from India to protect and ensure the livelihood security of its 600 million farmers. The treaty is being negotiated between 16 countries, including South Korea, Japan, Australia, New Zealand and China.

Surprisingly, every time India enters into a trade negotiation, it seeks ‘greater market access for its services, including easier norms for its professionals to move across borders for short-term work’. While this is certainly important but I what I fail to understand is why agriculture is being deliberately sacrificed in the process. After all, protecting domestic agriculture, which entails the livelihoods of 600 million farmers, cannot be placed on the chopping block of international trade. Take the case of dairy sector. According to Jayan Mehta, senior general manager of Amul dairy cooperatives, 15-crore livelihoods engaged in dairy farming will be severely hit from the current RCEP negotiations.

India is the biggest producer of milk in the world. Presently, the imports of milk and milk products are allowed with an import duty ranging between 40 to 60 per cent. This provides enough protection for the local dairy industry to build its competitiveness. Opening up the flood gates will inundate India with cheaper milk flowing in from Australia and New Zealand. Let us not forget that while Australia which has only 6,300 dairy farmers; and New Zealand with 12,000 dairy farmers are pushing in aggressively to protect the economic interests their small dairy farming community, India is willing to sacrifice the livelihoods of 15- crore farmers.

Also read: How World Bank’s Economic Chakravyuh Is Trapping Indian Farmers

Since India has a huge domestic demand of milk, it doesn’t have the kind of export surplus that Australia and New Zealand have.  Just because Australia and New Zealand are willing to provide more access to IT professionals does not mean India should put dairy farmers on the chopping block.

Dairy is not the only commodity for which the market is to open up. India will have to open up for all kinds of fruits, vegetables, pulses, potatoes, spices, plantation crops, seeds, silk, processed foods etc. Although India is still insisting on allowing zero tariff import on only 80 per cent of the traded goods, and is seeking a three-tier structure, the negotiations are led by the dominant and aggressive stance of countries like China, Australia, New Zealand, Japan and South Korea, which will eventually have their say.

It has taken so many years for the world to understand that WTO was designed to serve the commercial interests of only the top 1 per cent. Not drawing any lessons, the RCEP treaty is being negotiated under a complete secrecy. What was negotiated at the Hyderabad round of talks has not been made public. A few people sitting in heavily guarded negotiations take decisions, which eventually impact the future of 99 per cent of the population. This is grossly unfair.

This article was originally published on 9 August 2017 at Ground Reality under the headline “RCEP will undo the gains of food self-sufficiency built so assiduously over the decades” by Devinder Sharma.

Previous articleCalling the Chinese Bully’s Bluff
Next articlePakistan’s New Patriarchs
GGI News Staff http://gginews.in/ GGI News Analysis is a unique project initiated by GreatGameIndia to provide meaning and context to the randomly provided news day-in and day-out which often leaves the common populace wondering as to its real significance. We at GGI News would not only analyze daily news but also place it in the right perspective for our readers to understand it and thereby form their own independent opinion from the facts provided. Subscribe to our email newsletters or follow our page on Facebook and Twitter for more such analysis, debates and discussions related to geopolitics and international affairs from an Indian perspective. If you would like to contribute, please email your story suggestions to [email protected]