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Note to Modi govt: Take on US on cotton subsidy

India is one of the countries worst affected by subsidies for cotton in the United States, but unlike Brazil, it has not challenged the US on this, Stiglitz said.

Written by Johnson T A | Bengaluru |
July 7, 2016 3:18:43 am

RATHER THAN engaging in activities such as shutting down NGOs, it will be much more “constructive” for the country if the Indian government challenged the United States government’s subsidies on cotton, which tends to hurt cotton growers in India, Nobel laureate economist Joseph E Stiglitz said here Wednesday.

India is one of the countries worst affected by subsidies for cotton in the United States, but unlike Brazil, it has not challenged the US on this, he said. If New Delhi manages to that, and takes on the US on this issue, it will “have a positive effect for the global community”, he added.

“The US would rather walk away from trade talks than get rid of its agricultural subsidies. This has been a major barrier to removal of agricultural subsidies,” Stiglitz said at a discussion organised in Bengaluru by Azim Premji University on ‘Global Inequality: Causes and Consequences’.


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On the economic front, the Columbia University professor said an excessive obsession with controlling inflation will hurt India’s employment growth as well as the economy. He recommended expansion of the rural employment guarantee programme, or MGNREGA.

Specifying that inequality grows when there are high levels of unemployment, Stiglitz said, “There are two aspects relevant for India (at this juncture). The first is making sure that the overall economy grows at a rapid rate, and that means not being overly obsessed with inflation. Extensive focus on inflation almost inevitably leads to higher unemployment levels and lowered growth, and therefore more inequality.

“The second one that is important for full employment is the NREGA, and I think it is important to support and expand the programme.”

Stiglitz warned that there will be “tremendous pressure” on India from the Obama administration in its twilight days to change the Indian position on intellectual property and protection of investments. He said: “India has had a long-standing view that it has an IP protection system that has access to generic medicines. It would be very bad if India went back on that position on access to generic medicines…. It is important that India resists the pressure, which is basically from big pharma (companies), and does not represent the interest of the American people.”

Stiglitz said India will also come under pressure from the US to change its stated opposition against signing Investor-State Dispute Settlement agreements for protection of investments. “These provisions of trade agreements has had tens of thousands of people stage protests in Europe. India has long accepted that position, and it would be a big mistake to change that position,’’ he said.

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