India in the WTO

India’s insistence on an adequate special safeguard mechanism for agriculture is widely viewed as one of the contributing factors to the failure of the July framework talks in 2008.  Indian trade Minister Kamal Nath often describes India’s position on agriculture, including its demands for reduction in agri-subsidies by the developed world,  as a question of livelihood (and not of business) on which India cannot compromise.

What interests me is the connection between farmer suicides in India and the formulation of Indian trade policy on agriculture and the formulation of India’s Doha round negotiating position on agriculture. News reports in India about the Doha agricultural negotiations and Mr Nath’s various speeches do not directly refer to the spate of farmer suicides in India. Indeed, the political discourse in India itself (as visible in news publications) has not remained consistently engaged with this issue. Small periods of noisy outrage exist between longer periods where the issue is almost absent from the mainstream political discourse.

Though the numbers on these farmer suicides are disputed, yet even allowing for these variations, the figures are high enough to warrant a serious political impact and to expect an engaged political discussion. One would also expect that the issue would seep into agricultural trade policy issues and into Indian demands and sensitivities in the Doha round. (For example see my previous post about India wanting to be included in cotton subsidy talks – surely farmer suicides by cotton farmers in India show the serious impact of cotton subsidies for India and justify its inclusion. But I would suppose the emerging India story makes it embarrassing for the Government to flaunt this issue on the international stage).

Are farmer suicides an issue in the coming national elections? At least not in the English national press.   

So what are the facts? Where is the academic and policy research on these issues? Where are the domestic consultations with farmers groups over India’s position at Doha?

I plan to keep an eye out for what I come across on this and will post about what I find on this blog. But for the moment, the following would be of interest:

A March 2008 paper by Nagaraj of the Madras Institute of Development Studies titled ‘Farmers’ Suicides in India: Magnitudes, Trends and Spatial Patterns’, available online here  estimates that between 1997 and 2006, 166,304 farmers have killed themselves in India. For 1995-2006, the figure is close to 200,000. An average of 16,000 farmers have committed suicide in India every year for the last 12 years. The author considers even these figures an underestimation of the full extent of farmer suicides. Farmers without a property title to their farmlands are not included in the official definition of a farmer in some Indian states. The rate of suicides has shown an increase over the years. The farmers who have killed themselves are overwhelmingly male as per official figures. Female farmer suicides are most likely not counted as most female farmers would not have title to the land. Maharashtra, Karnataka, Andhra Pradesh,  Chhatisgarh and Madhya Pradesh are the top five states with the most farmer suicides. These are five contiguous states in the India heartland.

While India is now touted as a fast-growing booming economy (or at least was until the recent global recession), it is also undergoing a serious agrarian crisis. What is the link between farmer suicides and India’s agrarian crisis? The paper by Nagaraj points to a multi-causal explanation behind farmer suicides. He describes these as a social phenomenon certainly linked to India’s widespread and persistent farm crisis coupled with pre-existing conditions of vulnerability and an absence of alternative livelihood opportunities. Nagaraj dismisses sporadic, disjointed and single-point policy interventions and suggests that the crisis needs comprehensive policy intervention and a complete reorientation of agrarian policies. So where is the research on what should be India’s agricultural trade policy in the context of these suicides? 

Also see the Final Report on Causes of Farmer Suicides submitted to the Mumbai High Court from 2005 by the Tata Institute of Social Sciences.

Leaves me wondering who is accountable for these large number of deaths?

For more see this Counterpunch story, this New York Times story

Here is a curiously interesting report from the Economic Times … the Indian Committee of Secretaries has advice for the Ministry of Commerce:

Apply WTO-approved curbs to ban imports, advises CoS
28 Feb 2009, 0102 hrs IST, Amiti Sen, ET Bureau

NEW DELHI: The commerce department, which restricted the import of a number of items from China this fiscal by allowing only actual users to import them through special licences issued by the government, may no longer be able to take the measure on its own.

The committee of secretaries (CoS), headed by the Cabinet secretary, is of the view that such restrictions could lead to violation of multilateral trading norms established by the World Trade Organization (WTO) and should be used sparingly. It suggested that the decision to impose such restrictions, when absolutely necessary, should be taken by the CoS, a government official said.

The commerce department should, instead, use the WTO-approved special safeguard mechanism (SSM)—where special import duties are imposed to prevent import surges—to help industry against cheap imports, the CoS proposed in a recent meeting.

The commerce department, in November last year, had put a number of items on the restricted list of imports like hot-rolled steel and radial tyres which are being mostly imported from China. Import of all items on restricted list is allowed only by actual users through import licences issued by the government.

The import of restricted products is, thus, totally in control of the government — a situation WTO may not tolerate. “If we are taken to WTO by an exporting country and found guilty of violating WTO rules, retaliatory sanctions can be imposed against our exports,” an official said.

The use of special safeguard mechanism, however, is allowed by WTO as it leads to imposition of additional import duties on products once it is conclusively proved there has been a surge in the import of an identified product leading to domestic market disruption and injury to the industry.

New Delhi has already imposed safeguard duties on four items, all chemicals. The directorate general of safeguards, set up under the department of revenue, carries out investigations following complaints made by the domestic industry against increased imports of a particular commodity.

Once it is satisfied that there has been a sharp increase in the import of a product and has led to losses for the domestic industry, it imposes 200-day temporary import duties on the product. The safeguard duty could be in place for up to three years if the domestic industry continues to be threatened by imports.

With the slowdown leading to contraction in global demand, the government is focusing on protecting the domestic industry against cheap imports.

Thoughts … turf wars?

Also, the Committee of Secretaries view might give ideas to Chinese trade officials about a potential WTO violation here on Indian restrictions on imports of hot-rolled steel and radial tyres. 

And with the global economic crisis and the slow-down in India, there seems to be general protectionist sentiment all-around. In an election year, the Indian government has not much option but to protect domestic industry and very little appetite for signing new FTAs and lowering any tariffs. See earlier post