BARTERING OUR SOVEREIGNTY OR FACE LITIGATION: WTO STAND – BY Dr. BOBBY SRINIVASAN AND Dr. SUDHAKAR BALACHANDRAN

September 25, 2014 | Posted by bobbysrinivasan << back to blog

WTO Agreement on Agriclture (AOA), put together by the developed nations during 1990’s is completely warped and tilted in favour of them. This agreement is much against the sovereignty of India particularly with regards to food subsidies. According to the AOA “India should keep its food subsidy (rice and wheat are main products) within 10% of the value of total production. In calculating the value of reference price goes back to the 1990’s. the subsidy is calculated as follows:

Current market price less the reference price set at 1986-88 levels under the AOA.

If the subsidy is exceeded, India will face litigation and sanctions as per the WTO rules.

The recent Indian stand challenging the subsidy rules has created a furore in the global community. Commerce minister Nirmala Sitharaman took hold in a WTO meeting by informing the latter that there is no deal on trade facilitation if the food security issue is not taken care of.

The developed countries offered a peace clause during the Bali discussion in December 2013 which was accepted by the then UPA government. According to this, India will not face any sanction till 2017. There will be no recourse and India has to meet the dead line at all costs. There is an important learning take-away for India which are as follows:

A country’s sovereign rights and obligation are paramount and cannot be sacrificed at the altar of free trade or globalization.
The AOA is restricting India’s right to stock pile food grains to ensure food security to its people, especially in times of draught. This condition, if accepted, will expose India to serious food shortages if our monsoon fails in any given year.

The Western countries argue that India can always import food in the event of a monsoon failure. Any commodity trader knows that whenever shortages exist in a commodity its prices will move up significantly.

LESSON: The WTO stand is thoughtless and could put the Indian economy and its people in deep peril. For example, if indeed the monsoon failed and food shortages arise, the western media will be the first one to accuse India for not acting proactively.

What should India do going forward? There can be no compromise on the stockpiling. Revisiting Indian history will show as to how many million lives were lost in the past due to hunger and malnutrition, we don’t need more experiences and we, in this regard, are not morons, not to have learned from such experiences. One possibility is to rework the Agreement on Agriculture (AOA) to make it fair across nations and should include concerns of monsoon dependent nations. The world has enough problems already and we don’t need one more to it.

Minister Sitharaman must be congratulated in taking a bold stand. History will speak well of her courage to withstand the top WTO top guns pressure. India is a sovereign democratic country and has inalienable rights to make its own laws and regulations to meet the aspirations of Indian people. There will be no compromise in this regard.

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