Opinion No more spoilers

I have argued before that India was willing to treat the earlier drafts as a base for discussion,since its interests lie in laying the foundation of more open trade as part of a widespread growth process. Issues of rural growth,employment and food security were important to it; the issue was not grain,but access. You need money to buy food,even if your farmers produce it and your shops have it. You need agricultural growth,not to grow grain,but to create a broad-based source of income. Paradoxically to grow on a widespread basis,grain growth will slow down. Diversification emerges when incomes grow fast in response to demand changes,but it was not happening fast enough.

Indian policy makers were willing to integrate monetary policy and tariff policy changes in a medium-term policy reform package which moves away from direct parastatal intervention to a crop-wise strategy — which was reform and WTO-compatible. There was then skepticism on whether the coalition which

India,Brazil and South Africa had built would last. A few months later,at a meeting in Buenos Aires on post-crisis global governance,I argued that the ideas India had raised would not go away.

While it was important to walk out at Cancun,why is it important to succeed after Delhi now? The first is that India has prepared,in a much better way,its own adjustment paths to a trade-dominated agricultural sector. In January 2009,the Government of India announced its decisions on the role of domestic price intervention in a WTO trade-dominated regime (following the recommendations of a committee I headed). The emergence of a globally competitive — based on efficiency costs — agri-sector,as recommended by the committee,was accepted as the objective of policy. Also concepts and policies uncommon in the early part of this decade — futures,efficient management and market-based distribution costs,producer companies and so on — were reinforced. But the cabinet significantly did not accept recommendations that price interventions based on tariffs would be based on a rule-based,long-range,marginal-cost framework of agricultural costs. The commerce ministry briefed the press unofficially that it wanted to give its WTO trade negotiators bargaining space and so opposed it. I may not be very happy; but the government’s commitment to an agreement stands out.

The other argument which gives urgency to India’s WTO negotiations is based on two major social developments. First is the UPA government’s implementation of the near-revolutionary National Rural Employment Guarantee Scheme. The second is the irrevocable commitment that the government will implement a food security scheme for all Indians,particularly those who have fallen in the cracks of the public distribution system. Both these massive projects will have to,eventually,be integrated with policies for widespread agricultural growth. This is an idea which is gaining near-universal acceptance: it was endorsed recently by the World Development Report 2008 and the FAO’s special report on

Indian agriculture. Markets,their development,their processing are the key. Strategic alliances must be encouraged. A hunger removal programme embedded in a comprehensive food security strategy has to be made part of the wider process of diversification and growth of agriculture.

With some luck India will keep up its momentum within the framework of global market reform and support for livelihood policies,as a part of market-led broad-based growth processes. It could play a creative role in negotiations over special and differential treatment,tariff bands and non-agricultural market access. After all,its dilemmas are those of the developing world.

The writer,a former Union minister,is chairman,Institute of Rural Management,Anand

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