Developing Countries Question Whether the Current Trade Regime Is Sustainable
The Agreement on Agriculture (AoA) was first negotiated and decided on by creating the World Trade Organization (WTO) in the mid 1990’s. It has become a long-standing conflict between farmers and governments, especially in developing countries worldwide. Farmers from countries such as India have been demanding a renegotiation of the AoA, as they claim they have been disadvantaged by integrating the agriculture sector into world markets. It has led to reduced government subsidies and support for the farmers, but the governments in developing countries that benefit from the mandate don’t seem keen on renegotiating.
Ever since the discussion of trade negotiations began, India has favored food security, farmers' livelihood security, poverty alleviation, and protecting the country’s domestic agriculture. These concerns resonate with the requirements demanded by other developing and under-developed countries. This collective bargaining power made decisions like the Bali Package possible, which promised a temporary peace clause for developing countries that breached the mandates for public procurement for food security purposes. However, developed countries like the United States of America have long protested India’s limited protection measures, such as the Agriculture Produce Market Corporation (APMC) Act, minimum support price, and public distribution system. The countries have continued to clash over the market principles and how they affect their nations' agriculture sector.
At the G-20 summit, Prime Minister Modi from India met with US President Joe Biden to discuss these issues. The Narendra Modi-led Union government subsequently announced a 20% reduction in customs duty on American apples, chickpeas, lentils, and other crops. The lowered customs duty occurred when apple farmers in India were already stressed due to a lack of remunerative prices from the private sector. In addition to increased income losses and decreased productivity, the farmers have been troubled by changing weather patterns, making apple cultivation far more complex. As apples are not a perishable good, they aren’t covered under the APMC Act and have no guarantee of an MSP. The farmers are begging the government to recognize the fruit under the APMC Act and prescribe an MSP for it.
Similarly, the government in India attempted to include the dairy sector in the Economic Cooperation and Trade Agreement signed with Australia in mid-2022. The government was met with extreme resistance from dairy farmers and was forced to keep the products on the exclusion list.
The Mechanised Agriculture Sector in Developed Countries
To learn more about why it may be time to renegotiate the mandate on the agriculture sector and why the current trade regime is becoming unsustainable, check out TheWire.in:
“It is now a documented fact that most of the agriculture sector in developed countries is mechanised. A few corporations have complete dominance over production, distribution, and storage. In this scenario, it is important to ask questions to the international community that farmers’ movements in India have posed to the ruling regime.
Is the present trade regime with its focus on the market, profits for corporations, increased market for the agricultural products of developed countries and reduced state support for the agriculture sector in developing countries sustainable? If it is not, should the mandate of the trade regime be renegotiated on the firm pillars of food security, livelihood security for farmers and increased state support for the agriculture sector in developing countries on the principle of equity? It is time for international negotiations to answer these questions.”
From Has the Time Come To Renegotiate the WTO's Mandate on Agriculture Sector? - The Wire
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Written by Agriculture Pro Source
November 9th, 2023