The WTO Compromise is NOT a Victory for India
Many commentators around the world are claiming a “victory” for India with the agreement at the World Trade Organization (WTO) talks in Bali between India, the United States (US) and the European Union (EU). The agreement allows India to subsidize agriculture for the purpose of food security for an “interim” period until the WTO can come to a formal agreement. As more information about the agreement comes out, farmers organizations and those working on the ground to provide for the poor are pointing out the paralyzing consequences of the agreement.
First, the agreement only allows India to subsidize food crops that will go into programs that stockpile food for public food security reasons: rice, wheat, and millets. India has enormous stockpiles of wheat (36 million tons) and rice (34 million tons) connected to its public distribution system, and it already provides these at subsidized prices to many of its poor citizens. India’s National Food Security Bill made these stockpiles more available to the poor through an expansion of the public distribution system and an increase in the allotted amounts delivered to many people.
Food stockpiles are important for survival, especially in times of crisis, but food security does not mean providing a healthy diet. The limitations placed on the India by the WTO prevent it from subsidizing other crops such as pulses and oils which help provide a more rounded diet to most in India, and these limitations have potential consequences for the health of India’s poor.
Second, the agreement limits India’s ability to tailor the National Food Security program to the needs of the people. Under the agreement states are not allowed to increase food subsidies beyond the amounts (in kilograms per person) allotted by the National Food Security Bill. Should a state realize that these amounts are not sufficient for the needs of its residents, it would be unable to increase them.
Third, the agreement requires that India report to the WTO that they have exceeded limits to agricultural subsidies and that they ensure that these subsidies do not distort trade in subsidized crops. This requirement leaves room for interpretation and could allow WTO members to challenge India’s program using the dispute mechanisms established by the WTO.
Lastly, the agreement leaves the structure of the WTO, one that gives the US and EU a distinct advantage, completely unaltered. The stance that India took regarding its food security program challenged the very structure of the WTO. When the WTO was created in 1994, the US and EU were allowed to subsidize their crop enormously, and they continue to do so. Those subsidies are used largely to enrich corporate farmers instead of providing resources for small farmers, new farmers, or hungry people in the US. By backing down from this challenge, India tacitly agreed to the inherently unequal structure of the global economy, and the US and EU will continue to use the WTO to maintain their dominance.