Rural poor to pay for urban elite

Nearly 600 million Indian farmers will now have to pay the price to keep 1.6 lakh jobs in the service sector afloat. This is the price that the poor and marginalized must shell out to keep the minuscule urban elite shining.

When Finance Minister Jaswant Singh refused to increase the minimum support price of wheat and rice last year, it was actually aimed at sending the right kind of signal to the Bush administration, which has been wanting India to open up its huge agricultural market to cheaper and highly subsidized American farm produce. Further lowering of import tariffs in the mini-budget this year, and the writing is clearly on the wall: India is willing to destroy millions of jobs in agriculture.

The US Trade Representative Robert Zoellick has made it abundantly clear. During his recent visit to New Delhi, Zoellick said “if India wants to have the ability to have outsourcing and wants to have the ability to sell goods to the United States, well you can see India is also going to have to open up.” Earlier, the US Agriculture Secretary, Ann Veneman, has said at Washington prior to failed Cancun WTO Ministerial: “Some developing countries argue that they shouldn't have to open up markets until the developed countries first make domestic support reductions. This is a formula for failure.” Instead of being cowed down by this warning, India should have stood up and held a mirror to Zoellick’s face.

Echoing the same brand of hypocrisy, the World Bank Chief Economist Nicholas Stern, while traveling through India some years back, denounced subsidies paid by rich countries to their farmers as "sin ...on a very big scale" but warned India against any attempts to resist opening its markets. “Developing countries must remove their trade barriers regardless of what is happening in the developed countries.” What needs to be explained loudly and clearly to the American government is that India has already phased out its quantitative restrictions on agriculture while the US has not stood by its promise of reducing agricultural subsidies. President George Bush had in 2002 announced an additional US $ 180 billion subsidy for agriculture for the next ten years.

The two biggest democracies therefore work at cross-purposes. While the US did not even think twice to curb outsourcing by the US government departments, and that too in a complete turnaround to the free trade paradigm that it continues to swear by, the Indian government feels ashamed in protecting its domestic jobs. Despite the defiant public face put up at the Cancun Ministerial in September last, the Indian government has actually been busy dismantling the planks of the food self-sufficiency strategy that saw the country emerge from the throes of hunger and starvation.

For the past three years, the NDA government has been more than keen to seek political backing for dismantling the Food Corporation of India, which in other words puts the small and marginal farmers at the mercy of the markets. When this didn’t work, the government allowed the private trade to move in for direct purchase from the farmers. With the procurement prices now being floored, farmers will now be in the hands of the merciless traders. FCI will now be divesting of its responsibility to procure the grain surplus that flows into the markets and instead get into exports.

With the quantitative restrictions on agriculture already removed or phased out, India is now become an open field for cheaper food imports. Already agricultural imports into the country have multiplied four times in the past decade, and more and more imports are now destroying the capacity of the Indian farmers to compete. Except for public statements, there are no efforts to protect the domestic farm sector. Knowing well that importing food is like importing unemployment, the government continues to turn a blind eye to the destruction of the farm production capacity.

India's refusal to stand up to the threats from Robert Zoellick and the European Union Trade Commissioner Pascal Lamy shows how insensitive the Indian government is to plight of its own workforce. At the same time, it is an indication of the government’s inability to feel the unemployment crisis that continues to swell the countryside as well as the educated unemployed in the urban centers. Somehow the feeling is that agriculture can be bartered for the gains of the educated elite in the cities. The livelihoods of 600 million farmers cannot be sacrificed at the altar of unjust economic development that showers all the benefits to the urban rich.

There is nothing wrong in the way America has tried to protect its loss of jobs from outsourcing and also from agricultural opening up. Every government has the Constitutional obligation to provide for more jobs, and to reduce unemployment. It knows where its economic interests lie. America has merely stood by the letter and spirit of its own Constitution. On the other hand, the rural masses in India, hovering in the range of 600 million to 800 million, have all disappeared from the radar screen of the NDA government. India is willing to sacrifice the survival of its masses for the sake of a few thousand educated rich. This barter arrangement will cost the nation dearly.