Free Trade and Indian Agriculture
with thanks to Upendra Bhojani who developed this work so far
Agriculture constitutes a vital part of India's economy and so of its workforce. India started trade liberalization reforms in agriculture in 1990s and is a founding member of WTO signing its various agreements in including Agreement on Agriculture. This latter agreement especially was about reducing domestic support/subsidies by developed countries while reducing tariff and non tariff barriers by developing countries to enhance market access and more open trade across countries in agriculture ([1]).
Consequently along many developing countries, India reduced tariffs and import duties as well as removed quantitative restrictions on agricultural import while on other hand total domestic farm support provided by developed countries has not shown any significant decline. In US subsidy to mere 90000 farmers has increased by 700 times since 1996, while in India domestic support to her 600 millions farmers is actually negative to what India is allowed to provide under AOA.([2]) ([3]).
With such scenario, International prizes of many agricultural commodities went to its lowest limit in and Indian market started getting flooded with cheap import which increased by 300 per cent in value terms between 1996-97 and 2003-04 while India's export actually declined from 1995 to 2001 with marginal recovery in last years ([4]).
A poor Indian farmer, with minimal domestic support can't compete with heavily subsidized products from developed country and more than 25000 farmers committed suicides from indebt ness and many farmers started moving to urban areas as unskilled labor leading to steady decline in agriculture workforce and its share in GDP. Consequently there is deceleration in output of all agricultural produce touching its lowest limit in recent years threatening food security and self sufficiency of country ([5]).
And if such adverse impacts of agriculture liberalization in an unequal global platform have not done more harm, India is now desperate to make free trade agreement with US to go further down the road of liberalization. The framework is already being built for possible Indo-US FTA with establishment of US India CEO forum with visit of Indian PM to US in 2005. Recently released report by CEO forum makes recommendations which are mainly about removing quantitative restrictions and liberalizing visa regime by US for IT and health professionals, as well as other service sectors in India, while India need to open its economy in most sectors including Agriculture with progressive removal of tariff and non tariff barriers ([6]). FTA is especially being promoted by current neo liberal national government in India with its sole aim to fetch more FDA, and by corporate sectors in India and US who will be chief beneficiaries. Missing from the picture are common citizens Indian and especially farmers of India suffering its adverse impacts.
Possible action area
1. Studying World Health Assembly's recent resolution on trade and public health adopted on 27 th May 2006 ([7]) ([8])
2. Promoting and assisting JSA (PHM India) to launch 'trade policy initiative' in addition to its current 'health policy initiative' and 'drug policy initiative'.
3. Finding ways to advocate against probable Indo-US FTA (Using JSA)
