EU - INDIA FTA Will damage Indian Farmers

(Dr. krishan Bir Chaudhary)

The present global trade regime does not present a fair play. Developed countries are backing their farm production with a heavy dose of subsidy and are also protecting their farm sector by high tariff barriers and unjustified non-tariff barriers. In this, situation if India reduces its bound tariff rates (which are already lower), there would be an influx of cheap subsidized imports from the developed countries.

India, being a tropical country, is bearing the burnt of the climate change. We are facing extreme weather conditions leading to droughts, floods, cyclones. Indian agriculture has become vulnerable not only due to climate change but also due to the policy of economic liberalization pursued by the government and globalization of trade.

Agriculture in India is a way of life of 750 million small and marginal farmers. It is a source of livelihood and not a business. In fact, agriculture cannot be a business for family farms, it has to be a source of livelihood. This truth holds good also in developed countries of Europe and the Americas, where small family farms still exists.

History has shown that small family farms did not depend on subsidies. The subsidy regime began with corporate and mechanised agriculture which has to depend upon a heavy dose of subsidy.

Thus agriculture trade liberalization without removal of all subsidies (Amber, Green and Blue Boxes) will lead to cheap subsidized imports in the developing and least developed countries. The Indian farmers will be largely affected by such cheap imports. Their livelihood would be at risk.

Therefore, there can only be two alternatives  One is removal of all subsidies and a meaningful tariff regime and removal of unjustified non-tariff barriers, including sanitary and phytosanitary norms. Indian farmers can survive without any subsidy, provided the rules of the trade are fair and equitable. The other options is to have a protected market regime having the options to impose quantitative restrictions on imports and exports.

As long as unfair trade practices remains and corporate houses controls agriculture and agriculture trade, the world will always witness volatility in prices. Volatility in prices would be caused if land is diverted for production of bio-fuel crops and food crops are used for production of fuel oil. Such was the case in 2008 when the food prices soared up and moved in tandem with the prices of fossil oil. The FAO then raised the alarm for a likely global food insecurity.

Liberalising investment restrictions in retail will lead to the loss of livelihood of over millions of peoples dependent on retail business. In India, domestic corporate houses have entered in retail business and farm produce trade. We are experiencing the results of high retail prices. There is a wide divergence in wholesale and retail prices. This evidently points to the deliberate manipulation in trade. The future trading has also worsened the situation.

The government has banned futures trading in select agriculture commodities to rein in the rising prices. This present situation of rising prices does not benefit the farmers as the prices fall at the time of harvest. The price rises when the produces are in the hands of the trade and industry. The consumers suffer on account of rising prices.

Opening up for investment in the processing sector will strengthened the corporate stronghold over agriculture. The ideal solution would be to involve unemployed rural youth in processing through proper incentives and support



( Kisan Ki Awaaz Magazine )