India, be agro

  • 23/04/2008

  • Financial Express (New Delhi)

As Union commerce minister Kamal Nath studies India's negotiation dockets in preparation for a mid-May World Trade Organisation (WTO) ministerial meet in Geneva, a sort of last-ditch attempt to strike a Doha Round deal before a change of US leadership, some voices have emerged in favour of softening the country's stance on farm sector issues. There are over 100 specific points of discord, of course, which makes deal-making all the more difficult, but the broad suggestion being made is to give up the insistence on the US and EU reducing their agriculture subsidies to levels that would assure Indian farmers of a level playing field. India, goes this new line of reasoning, is a net importer of agri-produce, and given the current food crunch, it may be in the country's interests to let US/EU subsidies keep our import bills low. India's intransigence on subsidies, according to many international observers, has been a big impediment to a larger Doha consensus on farm policies and allowances. Now in need of cheap imports, India should yield to the US and EU. Till recently, this argument was not taken seriously. But now that the PM's outgoing media advisor Sanjaya Baru has added his weight to it (in his personal capacity, though), it merits some discussion. For one, the US system is so well institutionalised that such policy issues tend to eventually work in non-partisan ways, regardless of electoral campaign scares. So, negotiating with a "Bush administration' clock ticking at the back of our heads may not be necessary at all. It has been nearly seven years since the Round began, and there's no need to force the pace now. Second, Kamal Nath's contention that this is about the "prosperity' of Western farmers versus the "livelihood' of Indian farmers does indeed hold true in the medium and long term. Once made, trade deals cannot be remade so easily, so it's better to bet on the long term, and, in general, a field free of distortions ought to work in India's favour. Taking the convenient option at this point is not very smart, and there is merit in Kamal Nath's reference to "future generations' that must be kept in mind. It is good that the minister is holding his WTO nerve. But that does not absolve the government of its failure to initiate farm sector reforms