On November 21, the price of crude crashed. It recovered slightly, but there was considerable ferment in markets. Energy and finance experts don’t like to be told that energy price rises give a pass for most corporates, but a number of studies have shown that a fall in crude prices is generally not passed on to the consumer. Economists call this the ratchet effect in the sense that there is asymmetry in the impact of falling, as compared to rising prices of something as important as fuel. But while prices may be sticky on this count, India is a crude short economy and these events do reflect on the bottom line.
Two days before the crude price fell, Commerce Minister Suresh Prabhu declared that “Old issues at the WTO cannot be forgotten; new ones to be addressed too” (emphasis added). The honourable minister, with this single declaration at the conference on “Strategic Alliance for WTO and Trade Remedies Law and Practice”, organised by FICCI and Lakshmikumaran & Sridharan, give up on behalf of the Government of India a position that India has fought for decades for its farmers and for food subsidies to its poor. Interestingly, the minister aligned himself and our country with the interest of the corporate sector and its substantial links with multinationals and global financing agencies. He also hit a blow on India’s leadership of the developing countries on this issue. I am not generally prone to strong language, but the occasion demands a stand.
In 2018, India has rapidly modified a position it had held for decades in the agricultural globalisation debates. The 11th Ministerial Conference of the WTO was held at Buenos Aires in Argentina from December 10-13, 2017. PTI reported that the US administration informed the US Congress that India blocked a Ministerial Declaration at that conference taking a firm stand on special and differential treatment. But in March end 2018, Prabhu did give an indication of what was underway, when he reportedly said: “While some of the new issues being raised by others may also be of relevance to India, existing issues such as agriculture are critical livelihood issues which are extremely important for India.” (emphasis added). But now this is official. With this statement, India changed a policy stand taken for more than two decades. To explain the move, it is necessary to go back in time.
In the field in a literal sense, the food security angle is still compelling. WTO’s proposed restrictions on India’s initiatives on food security are also sourced from our own pundits, working as experts with governments. But at a meeting of a corporate trust on social service on November 19, a field report showed that around two-fifths of the women in a tribal area were malnourished and more than two fifths anaemic. So, this WTO issue is not just an “academic one”.
We must protect both food security and farmer support programmes. This would provide the basis for the “no challenge” clause Prabhu was reportedly working on to defend public stock holding in the green box over the 10 per cent subsidy limits, which he is now willing to give lower priority. This is important if India is to escape the trap of the so-called Peace Clause of either four or eight years, giving up eventual abolition of hunger over temporary relief from global grain cartels.
We need to take a stand. When the WTO was set up, Rajiv Gandhi held out until the end with his Brazilian counterpart and changed the discourse. At Doha, Murasoli Maran fought to the end for the livelihood clause despite his poor health. This is terribly important, for in the context of small holder agriculture and malnourishment, models which support agriculture without nuances of size are like the gifts the Greeks brought in wooden horses. A consistent stand is essential for as the DG of WTO — a friend from another developing country — pointed out, they will press for trade facilitation and our bargaining space will become narrower.