Populist politics at home plays spoiler for Bali WTO Meet

The latest resort to open up the world trade is all set to close stages at a disappointing end, with India playing the wet blanket, out rightly rejecting the Bali package. Not only does this thump down dream of the 159 WTO member nations to realize easier trade across the world borders, but also confines the global trade from pocketing monetary infusion of nearly $1 trillion on an annual basis.

But, what exactly prompts India to disrepute the present outline of four-year-peace-clause, which ostensibly is an offer worth grabbing for other participating nations? Should populist agenda (read Food Security Scheme) laid down in the wake of forthcoming parliamentary elections be labeled as the chief cause? Or, are we playing Robin Hood fighting altruistically to institute a fair and equitable world order, which is devoid of any discrepancies in the global trade rules?

Nevertheless, what’s most assured is that India is not taking many friends back home after the meet. India, which stands totally secluded at the moment for being a stumbling block to a historic global accord, is not only facing confrontation from developed nations but also from Indonesia and China, the fellow G-33 members, which are fervent on a victorious Ministerial.

Where lies the real hitch?

The Indian delegates to the island nation have been relentlessly stressing in their addresses to media that it won’t be in interest of India to bulge down against swelling pressure from developed nations to approve the negotiations at Bali meet, even if India has to own culpability for the talk’s breakdown. Nonetheless, the real hitch lies elsewhere!

The G-33 grouping which includes 46 developing nations has proposed to chart out amendments in the WTO Agreement on Agriculture so as to procure food grains for poor at better minimum support prices (MSPs). The changes would also abet poor farmers to sell food grains at attractive prices, through the medium of public distribution systems (PDSs).

In the wake of national elections in 2004, Indian coalition government extended a food welfare program to about 800 million people this year. But, present food security law asks for increasing spending on food subsidies to about $21 billion, from $14.4 billion by a whopping 45 per cent, which would be illegitimate as per the present WTO rules. The farm accord that is followed in attendance doesn’t authorize member nations to surpass their food subsidy levels beyond the prescribed ceiling of 10 per cent of state output. So, New Delhi wants exemptions to run till the time permanent resolution is drafted, doing away with four-year-peace-clause. This is a clear condition put out on the table by the Indian Commerce Minster Anand Sharma for endorsing the Bali declaration. Otherwise, proffering out 5 kg of grain per person per month would become an unrealized dream for the UPA government. While MNREGA did the trick for UPA in the last elections, Food Security Scheme is considered a vote garner this time around.

G-33 members allege that available subsidy level is designed on the rates prevailing in 1986-1988 and thus, doesn’t match current market prices which have climbed considerably since then. The rising inflation levels especially in India, with Consumer Price Inflation (CPI) crossing the 10 per cent mark at present, further validate the cause.

Considering this, developed nations proposed a four-year-peace-clause that was drafted with a four year allowance and is only a part of pro tem solution, with permanent one still to be charted out. However, India is hell bent on adding a line or two in the proposed draft, which attends to its apprehension, right here, to safeguard its position in the long term and conciliate huge farmer votes back in the nation.

The current obdurate stand taken by India under disguise of commitment towards eradicating hunger in the country and other parts of the world can only be seen as part of populist measure to placate huge poor farmer population in the country.

Agriculture remains the livelihood medium for millions of farmers in the country. Paying higher support prices (in return of growing food grains which are included under the Food Security Scheme) can act as an enticement to the farmers, also helping the government in procuring adequate amount of food grains for its populist Food Security Law, the largest scheme of its kind, anywhere in the world. Distributing food grains at highly subsidized prices can indubitably add to the fortunes of the political party in a nation, where a large number of population lives impoverished, even after more than 60 years of achieving independence.

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