Dr. Mencher on US-India trade disagreement: “India is Right”
In a letter to India Abroad published last week, Dr. Mencher argues that “India is Right”, even though the mainstream press appears overwhelmingly in support of the United States against allowing India to subsidize grain production and storage as part of its National Food Security Bill.
The controversy erupted when United States trade representatives complained about India’s National Food Security Bill during the Bali round of trade negotiations. India’s National Food Security Bill passed earlier this spring, and it aims to make cheap food available to needy people–India has the largest number of malnourished people of any country on the planet– and at the same time to establish adequate floor prices for food grains so that small family farmers can make a living (See our post for more details).
Dr. Mencher writes that:
“the US is ‘frustrated’ because India is demanding as a condition of its acceptance of a new trade agreement, that the World Trade Organization rules on agricultural subsidies be waived so that India can subsidize grain production and storage, which Indian officials consider necessary to protect the poor in case of inadequate harvests”.
“The US and European Union oppose India’s plan on the grounds that it would ‘create a massive loophole for potentially unlimited trade-distorting subsidies.'”
“But, in fact, the greatest distortion of trade results from a waiver obtained by [the US and European Union] in 1948.., allowing them to give huge subsidies to farmers.”
“The present WTO rules require India to allow the import of grains priced far below those produced in India” which would give the US permission to “dump our highly subsidized huge grain surpluses in India.”
“The plan which the US and EU are pushing through is parallel to the way in which the Indian textile industry was destroyed by the British in colonial times, and would probably produce a similar result”.
To read the Dr. Mencher’s full letter, click here.