India takes up poor farmers' cause at Cancun meeting
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India takes up poor farmers' cause at Cancun meeting

Arun Jaitley said plight of poor farmers was linked to agricultural subsidies given by rich nations.

business Updated: Sep 11, 2003 14:44 IST

Turning the tables on the developed countries, India has made a forceful plea at the WTO ministerial meeting here saying that the plight of poor farmers were directly linked to subsidies given by industrialised nations to their farmers and the answer lay in correcting such distortions in agriculture.

In an apparent attack on the European Union and the United States trying to thrust their agenda, particularly on agriculture, through the backdoor, the Commerce Minister Arun Jaitley wanted development dimension to take the centrestage in the negotiations and demanded that the conference move towards a more "inclusive and transparent" decision making process.

In his statement to the fifth WTO Ministerial on Wednesday, Jaitley pointed out that the protection to agriculture in developed countries was four to seven times more than that for manufactured goods.

This stimulated over-production in high cost rich countries, shutting out potentially more competitive products from developing countries.

"It is no surprise that over the past few years, agricultural exports from developing countries to developed countries grew at just half the rate they did to other developing countries", he said.

"Let us also remind ourselves that the agriculture subsidies provided by OECD countries are more than six times they spend on official development assistance," the Minister said.

The OECD Governments support sugar producers at the rate of $6.4 billion annually, an amount nearly equal to all developing countries' exports. Subsidies to cotton growers in a developed country totalled $3.7 billion last year, which was three times that country's foreign aid to Africa, Jaitley said, reeling out statistics to highlight the distortions in agriculture affecting developing countries.

The EU and the US had come together at the eleventh hour to provide a pro-developed framework which was sought to be smuggled into the revised ministerial draft text and this was widely opposed by several developing countries including India by giving an alternative and counter proposal.

Both EU Trade Commissioner Pascal Lamy and United States' Trade Representative Robert Zoellick had said that the draft ministerial text would form the basis for the agriculture negotiations here.

But after protests from developing countries, the chairman of the conference, Mexican Foreign Minister Louis Earnesto Debrez agreed that the facilitator appointed for agriculture would also take the G-21 developing countries' proposal into consideration.

The Singapore Trade Minister has been appointed as the facilitator for agriculture, who will assist the chairman and submit a proposal by Friday after taking the views of various parties and groups.

Apart from G-21 proposal, a group of 23 developing countries led by Indonesia has submitted a proposal on new strategic products and special safeguard mechanism on agriculture.

"The net effect of subsidising agriculture in developed countries at the expense of products of relatively poor in developing countries is to aggravate global income inequalities," Jaitley said, adding instead developing countries were being asked to liberalise their agriculture against "equity, justice and fair play."

What the farmers in developing countries demand is protection from distortion in the trade of agricultural commodities, created through the high level of subsidies in the developed countries, he said.

As the plight of farmers in India and other developing countries were directly linked to the level and kind of subsidies in the developed world, "it would be difficult for us to agree to negotiations, which could potentially place at high risk the very livelihood of 650 million people in India, who are solely dependent on agriculture," he said.

It is only when the developed countries agree to take five steps forward in the removal of trade distorting subsidies that the developing countries can take one step forward in the area of market access, Jaitley said.

The legitimate concerns of billions of farmers in developing countries, for whom agriculture means survival and not commercial operation, cannot be sacrificed to sub-serve agri-business profits of a few millions elsewhere, sustained through one billion dollar subsidies each day in the OECD countries, he said.

The European Union, however, contested the figures and claimed it was much less.

Jaitley underlined the need to bring down the high tariff and non-tariff barriers on products of export interest to developing countries to secure sufficient gains from globalisation.

He said special and differential treatment for developing countries and policy space to deal with sensitive products in agriculture taking into account their development needs, including rural development and food security and livelihood concerns remained an integral part of all elements of negotiations.

"India reiterates that under no circumstances can it accept any form of harmonisation of tariffs in agriculture or obligations to create and expand tariff rate quotas", he said.

"India along with 19 other members has put forward joint proposals on agriculture that we believe offer a constructive and meaningful alternative. We look forward to discussing it at the conference," he said.

On market access negotiations for non-agricultural products, also known as industrial tariffs, Jaitley said suggestions for mandatory harmonisation and elimination of tariffs would be most inequitous to developing countries.

As various countries are in different stages of development, "we did not have capacities to understand binding obligations in all the seven sectors proposed for tariff elimination", he said.

Disappointed over development dimension envisaged in the Doha work programme having been given "short shrift" Jaitley said the draft Cancun Ministerial meeting text was grossly inadequate on implementation issues and would severely affect the interests of developing countries in agriculture, industrial tariffs and Singapor issues.

"We cannot escape the conclusion that it does not accommodate the legitimate aspirations of developing countries and instead, seeks to project and advance the views of certain developed countries", he said.

"If we not restore the priority accorded to the outstanding implementation issues, the developing countries would be forced to conclude that the development elements in the Doha Development Agenda is only rhetoric," he said.

On Singapore issues, he said, "We do not believe that all the Singapore issues are trade related".

"Our srongest arguments still remain that WTO is not the right forum, that the traditional principles of non discrimination particularly national treatment are not appropriate for a development policy related issues like investment and the trade negotiators are not the right people to deal with movements of capital that have dynamics of their own."

"Significant and deep differences in the views of members on many elements of these issues existed," he said, adding hence "we are not convinced of the appropriateness of taking a decision on modalities for negotiations as it does not give us any idea of the substance and direction of obligations that agreements in this area may require us to undertake."

On Services negotiations, Jaitley said for developing countries including India, the balance of benefits in the negotiations would accrue to the extent to which their service providers were allowed to supply services in important overseas markets either from remote locations or through temporary movement of natural persons.

"In case the resistance among developed countries for agreeing to the request of developng countries for enhanced market access continues, this would substantially erode our flexibillity to make commitments in sectors of interest to developed countries," he warned.

First Published: Sep 11, 2003 09:11 IST