India cannot afford to de-link market access from the contentious issue of farm subsidies. Sacrificing food self-sufficiency and food security at the altar of Doha Development Round is no achievement. For India, it is important to ensure that the livelihood security of 600 million farmers is not jeopardised. Failure to do so will have severe socio-economic and political implications.

EVEN before the ink had dried on the controversial Hong Kong Ministerial declaration of the Doha Development Round, the World Trade Organization (WTO) has very conveniently shifted the entire focus of the ongoing negotiations to further lowering of tariffs in the developing countries.

The $360 billion domestic support that the rich countries provide for agriculture has been quietly swept under the carpet.

Despite loud claims to the contrary, Commerce Minister Kamal Nath is gung-ho on identifying the number of ‘special products’ and thereby immune from any tariff reduction commitments that he thinks will protect the food security and livelihood concerns of 600 million Indian farmers.

Commerce ministry has prepared a list of more than 300 tariff lines, out of the 680 that India has for agriculture, that it intends to put on the negotiating block.

Agricultural subsidies have simply disappeared from the negotiating agenda. Making the underlying intention very clear, WTO director general Pascal Lamy has already said “the decision at the Hong Kong ministerial to allow self-designation of these special products was the price for getting developing countries to agree to ambitious formulas that will cut high tariffs more than low tariffs”. Special products, therefore, was a carrot that the developed countries had dangled before the developing countries at the Hong Kong Ministerial.

Trade in agriculture had so far remained embroiled in the contentious issue of subsidies — presently computed at $1 billion a day that the 30 rich countries forming the OECD (Organization for Economic Cooperation and Development) provide.

By offering to phase out export subsidies – and that too in the next eight years – the rich industrialized countries have managed to protect the monumental support they provide to agriculture, which in turn distorts the global market.

Export subsidies not even being one per cent of the total subsidies, the developed

countries had succeeded in throwing peanuts before monkeys.

Just before Hong Kong Ministerial in December, Kamal Nath had shouted from every rooftop: “What the US proposed last month is not real cuts in agriculture subsidies. The real cuts would be when there is decline in the support provided by the US treasury.” He was referring to the US offer to reduce domestic support by 53 per cent and the EU following it up with another offer of 70 per cent.” Interestingly, post-Hong Kong, for some strange reasons the minister agreed to the same commitment.

The US/EU offer pertained to cut the ceiling on trade-distorting subsidies by 60 per cent and 70 per cent, respectively. Let me clarify here that the US/EU proposal did not mean reduction in farm subsidies by 60 to 70 per cent but a reduction in the ‘ceiling’ on trade-distorting subsidies.

As far as the overall reduction is concerned, it does not translate into any reduction in the domestic support being given. The $360 billion will remain untouched.

At a day-long meeting of trade negotiators in London, ahead of the G-6 summit scheduled for March 10, senior trade officials from the US, the EU, Brazil, India, Australia and Japan debated only on how to overcome the differences in the market access pillar of the Doha farm trade negotiations. There was no mention of agricultural subsidy commitments. Even India, which has a larger stake in agricultural subsidies issue, preferred to remain quiet. What is baffling is that the U-turn in India’s approach is contrary to all the commitments made in parliament. India had all-along promised not to talk of any further market concessions till the issue of subsidies is resolved.

This is because a dominant section of India’s trade negotiating team is convinced that special product is the shield that Indian agriculture needs. Before and after the Hong Kong Ministerial, the commerce ministry has only been trying to convince stake-holders of expanding the list of special products.

Such a misplaced approach is coming at a time when it is well-known that the developed countries are not going to allow more than eight per cent of the total tariff lines to be classified as special products. The remaining 92 per cent of India’s agriculture is being put on the chopping block.

Taking refuge behind the smoke screen of ‘special products’ is not going to protect Indian agriculture. As long as subsidies remain intact there is no way developing country agriculture can be protected. It is only because of subsides that the developed countries have ‘comparative advantage’ in major agriculture products and commodities. Withdraw agricultural subsidies and they are left with no ‘comparative advantage’. There would then be no need of special products for the developing countries.

Nor is the special product a long-term protection. If you are still not convinced, read what Pascal Lamy subsequently said: “the use of special products will be limited, and in the future it will shrink.”

India cannot afford to de-link market access from the contentious issue of farm subsidies. Sacrificing food self-sufficiency and food security at the altar of Doha Development Round is no achievement. For India, it is important to ensure that the livelihood security of 600 million farmers is not jeopardised. Failure to do so will have severe socio-economic and political implications.

(Devinder Sharma is a New Delhi-based food and trade policy analyst)