Do not Accept an Anti-Development Package at Bali,
Reaffirm your Commitment to the People


We, as members of Indian Civil Society Organisations, farmers’ groups, trade unions and other members write to the Government of India to show our support for the decision of the Cabinet regarding its current stand at the WTO and urge you not to give up the long term interest of the nation for hazy short term promises.

We urge you to stand firm and reject the Peace Clause,  if it stands only for 3years. It has to be permanent.  Further, we urge you to ensure that the Peace clause is applicable to the Agreement on Subsidies and Countervailing Measures (ASCM).

We also urge you to take a development-friendly position on trade facilitation that secures India’s overall development needs and not feel pressurised by the developed countries and western media, which state that India stands between the deal and the world’s poor.

In spite of its high growth rate over the past few years, India still has widespread poverty and hunger. Of 600 million who depend on agriculture 80% are poor small farmers who are near subsistence. While official poverty estimates put poverty at 21.9%, the National Commission on Enterprises in the Unorganised Sector (2007) had found that 77% of Indians, or 836 million people, lived on less than 20 per day ( 0.31 USD) living in abject poverty. The NC Saxena Committee puts poverty at 50%. Whatever the numbers, it is undeniable that millions live close to the poverty line under precarious conditions.

India is positioned at 136th place in the 2012 UN HDI index. According to the global Hunger Index 2013, India is ranked 63 out of 120 countries and languishes far behind other emerging economies or even its neighbours Bangladesh and Pakistan. The Report also points out that the level of hunger in India is at “alarming levels’. By agreeing to extend the coverage of the recently enacted National Food Security Act (NFSA) to 75% and 50% of the rural and urban population, the government has acknowledged the dire condition and urgent food needs of a large majority of its population.

Under such severe conditions, the strengthening of both production and consumption systems in a synchronised manner is essential in order to ensure food security in India and to meet the hunger challenges that face 67% of the Indian population today,. This can only be done through a strong Public Distribution System (PDS) which procures food from farmers, most of them poor themselves, at a Minimum Support Price (MSP) and then distributes it at a subsidised issue price to poor consumers. Both the price and consumption components of the subsidy are crucial for supporting India’s food needs.

But the lopsided WTO rules on the Agreement on Agriculture (AoA), while allowing unlimited subsidies by developed countries, bars developing countries from providing essential price support even to poor farmers and even when the objective is to use such procured food to mitigate hunger and malnutrition of their poor.

In this scenario, we fully support the proposal by the G-33 group of countries, led by India, which demands such subsidies should be included under the Green Box and be allowed to give without any conditions. This is the only solution that can guarantee that the food security of 670 million hungry Indians and others in similar conditions across developing and least developed countries worldwide. This proposal has found strong support from civil society worldwide in the belief that this can perhaps address the historical inequities handed down to generations through the AoA.

However, it is now well recorded that the developed countries rejected most of the elements of this proposal, and have offered only a measly Peace Clause (PC) which gives India and other developing countries looking to use above limit food subsidies a temporary protection against legal action by other members.

Interestingly the original demand by the G-33 that a Peace Clause, even if discussed, must operate “till a permanent solution is guaranteed”, seems to have withered away in the current text and a 4 year peace clause that will expire in 4 years seems to be firmly established. A work programme is promised by the 11th Ministerial but that does not equal a permanent solution nor does it allow the PC to operate till one is found.

Moreover, the G-33’s proposal to extend this PC to other relevant agreements guiding subsidies, such as the Agreement on Subsidies and Countervailnig Measures (ASCM) has also fallen on deaf ears. Without that, India can still be dragged to dispute settlement. This is not all. The long list of onerous conditions imposed on this feeble offering has in fact made future disputes more likely. The PC requires detailed information sharing by India on what is essentially domestic policy and limits the coverage to very few staple crops, tying India’s hands in pursuing an independent and flexible food support policy.

So in essence while a permanent solution is not guaranteed by the Peace clause, what is guaranteed is permanent food insecurity where the government is likely lose control over its food policy options.

Under the circumstances, it is no surprise that Indian cabinet has finally decided to accept the PC only if it guarantees a permanent solution and extends to the ASCM. Given India’s food situation, there could not have been any other option. India must forcefully pursue the original demand of the G-33 proposal, i.e. to put such subsidies under the Green Box, where they rightfully belong.

Moreover, India’s position vis a vis the Trade Facilitation Agreement must be consistent with and subservient to its position on agriculture. India’s major interest is not trade facilitation but development, food security and ensuring the basic well being of its people.

The TF Agreement is again an instance of the anti-development stance of the current round of WTO talks. The developed countries have sought to promote import penetration through import facilitation, but remained unwilling to make binding commitments to help developing countries and LDCs with finance and technology so they can improve export facilitation, or in meeting the binding commitments they themselves seek. This is why, in spite of considerable push and shove by the USA, developing countries have largely refused to budge.

Given that the TF agreement on the table is not particularly pro-development itself, it makes no sense to accept it for the apology of a food security deal. In the “give and take” format the trade enthusiasts espouse so much, India is perfectly within its right to “give” only if it manages to “take” control of its food security and its policy space to do so. Until that can be guaranteed it is not in India’s best interest and the interest of its people, to say yes to the grossly unbalanced, unfair and unlikely deal at Bali. And as a developing country that is acting to protect the long term development objectives for its people, India can hardly be blamed for it. In fact it should be hailed for this decision.

We, as members of Indian civil society, believe it is time India says “no”. The cabinet has said no and all the Indian Commerce Minister needs to do in Bali is to respect that decision and not be influenced by the propaganda of the developed countries. And he will do his people and other developing and least developed countries a long lasting favour.

Signed by

  1. Focus on the Global South, India
  2. Madhyam, India
  3. Third World Network, India



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