(Dr. krishan Bir Chaudhary)
Farmers in developing countries have been severely hit by domestic and export subsidies provided by developed countries to their farm sector. This has depressed global prices resulting in developing country farmers not getting remunerative prices.
Developed countries have not only blocked market access for developing countries but are trying to push their heavily subsidised farm products into the markets of developing countries. The World Bank and the IMF have become instruments in pressurising developing countries to open their markets.
The developed countries have not fulfilled their commitments to reduce their subsidies and supports in the first phase of the agreement on agriculture (AoA). Instead, they have increased subsidies by 50% by shifting it from one box to another. In the face of increasing subsidies, it has become very difficult for developing countries to compete in the world market.
To have lower subsidy reduction commitments, developed countries are shifting the base years from 1986-1990 to the current years. It totally goes against the spirit of AoA. It has become evident that developed countries, which are pumping in farm subsidies to the tune of $ 1 billion a day, would try to continue providing support to their farmers in one form or the other.
India, too, has become a dumping ground for heavily subsidised agricultural products. In the on-going negotiations, India has to firmly state that till there are actual reductions in subsidies, the question of lowering its bound tariffs does not arise. While India has bound tariff duties ranging from 100% to 300%, applied tariffs are low. We must consider pushing tariff rates almost to our bound level.
Tariff escalation in developed countries is another factor affecting exports from developing countries. Higher tariffs are levied on goods exported at more advanced stages of processing. Sanitary and phytosanitary (SPS) measures and technical barriers to trade (TBT) are often used politically as weapons to stop imports from developing countries.
The G-20 ministerial declaration has not taken a proactive stand on the issue of subsidies. The group's demand on reduction of domestic subsidies is not specific. Developed countries should be asked to reduce 50% of their domestic subsidies in the first year. The remaining could be reduced in the next two-three years. Subsidies on export competition should also be phased out in the same manner.
Developing countries should not commit to reduce agriculture tariffs till the developed countries reduce domestic and export subsidies. They should seek commitments from developed countries before the Hong Kong ministerial conference. If they are not agreeable to this, the best course for developing countries would be to pull out of the ministerial.
If this happens, developing countries have to consider evolving their own strategy to safeguard their farmers, provide food security to their people and ensure livelihood for their agricultural workers. The first and foremost act should be to bring back the QRs, at least for agricultural commodities.
The agriculture agreement could also become a plurilateral agreement. Like services, each country can then consider application of the agreement related to their stage of development and scenario of agriculture in their country.
(Editorial : Farmers' Forum Magazine)