Thursday, October 31, 2013

Food Security Act is flawed but it’s not in conflict with WTO provisions

Suman Sahai
The recent Food Security Act passed by the UPA is indeed a politically opportunistic measure aimed at electoral gains for the Congress party but there is so much else wrong with the Act apart from the supposed friction points it offers to the WTO. In my view, these friction points are misplaced In calculating the Aggregate Measure of Support (AMS) in the Agreement of Agriculture of the WTO, it is producer subsidies that are to be kept in check so as not to exceed the permitted subsidy levels. We should point out to the WTO that the subsidies given in the Food security Act are not producer subsidies but rather consumer subsidies , provided as a welfare measure to the poor and indigent. This should not be construed as violation under AMS commitments.
The distinction between producer and consumer subsidy will have to be intelligently and forcefully argued.
For that the team entrusted to put forth India’s case, will need to understand the nuances of the WTO and the kinds of relief it offers to trading partners when things are going  radically against their interest. This is not to say the WTO provisions are benign towards developing countries but to say that developing countries need to build their skills to extract the maximum benefit from existing provisions.
One thing is clear though. India cannot and must not mortgage its future by granting concessions in food imports as a quid pro quo to getting this faulty law accepted by the WTO, just because it suits the certain political interests.
Importing food is tantamount to importing unemployment on the farm and depriving the farmer of the opportunity to produce what he can. Food imports will mean large scale dumping of agricultural produce by major agriculture producers who subsidize their produce at high levels. This will mean Indian markets being flooded with foreign foods, even as our own farmers are driven off their farms because they cannot compete with the highly subsidized foods coming from outside.
Having said that, I believe the impending potential dispute with the WTO should be viewed as a god send to rectify the really botched up , ham handed Food Security Act that the Congress is going to town with.
This country needs a legislation to provide food and nutrition security to its disadavantaged people but this Food Security Act will not do that.
How about this : India withdraws the Food Security Act and presents it to Parliament for amendments. If the lilly livered Opposition can get its courage together , it can happen and the country can get another shot at getting a legislation that honestly tries to sort out food and nutrition for the poor.

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