Indian Agrarian Crisis now moved to www.agrariancrisis.in

Farmer-the most endangered species

Not import liberalisation, but justified protection needed for farm sector

Posted by Ramoo on March 19, 2007

ASHOK B SHARMA

Posted online: Monday, March 19, 2007 at 0000 hours IST

NEW DELHI, MAR 18:  Reduction in tariff protection in South Asian agriculture has been the primary cause of import surge, leading to fall in employment in farm activities, lowering of returns to farmers and increased levels of poverty in rural areas. This is observation made by the South Asian Yearbook of Trade and Development recently released by the Delhi-based Centre for Trade & Development (Centad) and Wiley India Pvt Ltd.

The Yearbook further said that the absence of income and insurance safety nets compounded the problems leading to desperate and irreversible actions by afflicted farmers—an obvious reference to the series of farmers’ suicides.

The observations in the Yearbook is a caution to the Indian government which is deliberately engaged in the process of import liberalisation. The commerce minister, Kamal Nath at the sidelines of the recent World Economic Summit at Davos made an unilateral offer on behalf of the developing countries to be flexible on the issues of designation of special products and application of Special Safeguard Mechanism (SSM).

The agriculture minister, Sharad Pawar has openly favoured a liberalized export-import regime. Last week in the Parliament he announced that private trade, corporate houses and multinational corporation would be allowed to import dutyfree wheat. Government would also import 3 million tonne wheat despite a good production of over 80 million tonne wheat in the country, according to several experts. However, the government has made a conservative estimate of 72 million tonne wheat production, despite the increase in area under wheat crop by over 28 million hectare.

Government’s justification for allowing dutyfree wheat import is to augment its supply and arrest the rising trend in prices. But such action did not result in a solution and the government’s Economic Survey 2006 admitted that wheat imports failed to hold the price line.

Rather the global prices of wheat appreciated when India became a bulk import. Wheat production in previous year was sufficient to meet the domestic needs and so also is the case in the present year. The prime cause for price rise is deliberate hoarding of stocks and market manipulation, which the government is reluctant to control.

Unwarranted import liberalization is no solution, rather it may be counterproductive. The Yearbook suggests adequate protection of food security and livelihoods of small and resource poor farmers through multilateral disciplines of SPs and SSM. Discussions on SPs and SSM is central for the Third World. G-33, group of about 40 developing and least developed countries are meeting in Jakarta in Indonesia to discuss the strategy. G-33 has proposed that 20% of the tariff lines should be protected under SPs, while several civil society organizations have said that all farm produces should be designated as SPs.

In India, the agriculture ministry has identified very few products—about 80 tariff lines—as SPs. The Yearbook, however pleads for developing separate objective criteria for for designating SPs in South Asia which should be broad enough to cover large range of products. “An earlier case study on India has shown that 57% of tariff lines need greater flexibility as SPs. With regard to the SSM, price-triggers are found to be more appropriate than volume triggers.” Thus, let us act before it is too late.

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