Food insecurity (Editorial)
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22/07/2008
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Daily News Analysis (Mumbai)
Devinder Sharma
Flood gates for farm imports are being opened. In what appears to be a deliberate effort to integrate Indian agriculture with the global economy, the government is removing import duties on agricultural commodities.
The government's decision to withdraw 14 per cent import duty on cotton and bring it to zero is the latest in the series. While the decision is aimed at bringing down the domestic prices of raw cotton by allowing cheaper imports from Brazil, South Africa, Egypt and Sudan, it spells doom for millions of cotton farmers already faced with economic hardship. More than 70 per cent of the farmers who have committed suicide so far had been cultivating cotton.
Duty cut on cotton comes after the government had only a few months back waived off import duties on rice, maize and edible oils (raw). While the import tariff was brought down to zero for these major agricultural commodities, the duties on edible oil (processed) were slashed to 7.5 per cent.
Like in the case of cotton, the argument was that the duty cuts were needed to bring down the domestic prices for consumers.
Import duties on wheat and pulses had earlier been brought down to zero, and now with zero duty imports allowed for rice, maize, cotton and edible oils, India has now become an open field. And that makes me wonder how a nation can undo in haste what has been assiduously achieved over the past four decades.
After all, the saga of Green Revolution that turned the country self-sufficient in food production couldn't have happened if the import tariffs were kept at zero.
Importing food is like importing unemployment. The more farm products the country imports, the more would be the dependence on imports. Experiences all over the world have shown that cheaper imports have killed domestic production, and have pushed farmers out of agriculture.
Probably the only reason I can fathom for such policy initiatives is that the UPA-government believes that it is essential to remove the 80 per cent farming population from agriculture if it has to sustain a higher growth trajectory. An easy way to push farmers out of agriculture is to allow cheaper imports, thereby rendering farming unviable.
Take the case of cotton. Whether India grows medium staple cotton or long staple, the fact remains that cotton prices were deliberately kept low (Commission for Agricultural Costs and Prices estimates that prices were kept low by 20 per cent) to bail out the domestic textile industry.
This has over the years rendered cotton farming unviable, with the entire cotton belt reeling under economic distress. And yet, an ungrateful industry failed to rise up to the crying needs of the cotton farmers.
Instead of importing cheaper cotton from Latin American and African countries, the Confederation of Indian Textile Industry (CITI) could have drawn a roadmap inclusive of a package of practices and an assured market by involving the cotton farmers and textile mills.
Edible oil is another example. From near self-sufficiency in 1993-94, India has now become the world's second biggest importer of cooking oil. We now import more than 50 per cent of the country's edible oil requirement, as a result of which the domestic production capacity has been destroyed.
By bringing down the import tariffs to almost zero, the government has ensured that even the remaining production capacity is ruined. More than Rs10,000-crore that goes in importing edible oil actually should have gone to our oilseed producers languishing in the dry land regions of the country.
Ironically, the import duties have been slashed to zero at a time when a National Food Security Mission has been launched to improve production of wheat, rice, pulses and edible oils. How can production be raised when cheaper imports are flowing into the country? Zero-duty imports and the National Food Security Mission therefore run at a cross-purpose. The Rs8,000-crore that has been allocated for the National Food Security Mission will consequently go down the drain.
Still worse, the slashing of the import duties for major agricultural commodities makes a mockery of India's tough position at the continuing negotiations at the World Trade Organisation (WTO).
The question that needs to be asked is: Who needs WTO? What is the use of seeking higher numbers of Special Products