Farmers Demand India’s Withdrawal from WTO

The ongoing farmers’ protests at the Punjab and Haryana borders have evolved. Initially focused on the legalisation of the Minimum Support Price (MSP) for all crops, the farmers’ demands now encompass a broader call for India to withdraw from the World Trade Organization (WTO). Their concerns centre around the WTO’s Agreement on Agriculture (AoA), which they argue is detrimental to small farmers and threatens India’s food security.

Background of the Protests

The farmers’ protests began in late 2020, primarily in response to new agricultural laws. Over time, these protests have intensified, particularly in Punjab, where farmers rely heavily on MSP for their livelihoods. The situation has reached a critical point, with farmers observing events like ‘Quit WTO Day’ to highlight their grievances.

Concerns Over WTO Policies

Farmers argue that the WTO’s rules favour developed nations, allowing them to provide substantial subsidies to their agricultural sectors. This creates an uneven playing field for Indian farmers. The AoA aims to reduce agricultural subsidies globally, but farmers contend that it restricts India’s ability to support its own agricultural economy effectively.

Impact on Indian Agriculture

The AoA excludes critical sectors like forestry and fisheries, focusing solely on agricultural products. Farmers assert that this exclusion limits the scope of support available to them. The MSP system, which is vital for the procurement of wheat and rice in Punjab, is threatened by WTO regulations that restrict domestic support and subsidies.

Challenges Faced by Small Farmers

Small farmers, who constitute 86% of India’s agricultural population, face challenges under WTO rules. They lack access to modern technology and markets, making them vulnerable to global competition. The liberalisation of trade has exposed them to cheap imports, further destabilising their livelihoods and threatening food security.

Public Distribution System Vulnerabilities

The Public Distribution System (PDS) is crucial for ensuring affordable food for millions of Indians. However, WTO restrictions on subsidies and public procurement undermine this system. The farmers argue that these challenges could lead to increased food insecurity, particularly for those living below the poverty line.

Call for Stronger Representation

Farmer leaders have expressed frustration over the Government of India’s representation at WTO meetings. They believe a stronger stance is necessary to protect the interests of small farmers and ensure fair trade practices. Critics argue that the Government of India has not adequately defended its agricultural policies against pressure from developed nations.

Future of Indian Agriculture

The ongoing protests and demands for withdrawal from the WTO reflect a broader concern about the future of Indian agriculture. Farmers fear that without policy changes, their livelihoods and the rural economy will remain at risk. The need for a balanced approach that supports domestic agriculture while engaging in global trade is now more pressing than ever.

Questions for UPSC:

1. Critically examine the impact of World Trade Organization rules on the agricultural sector of developing countries like India.
2. With suitable examples, discuss how the Minimum Support Price system affects farmers’ livelihoods in India.
3. Explain the role of the Public Distribution System in ensuring food security in India. What challenges does it face?
4. Discuss in the light of current agricultural policies, how can India balance global trade obligations with the needs of its farmers?

Answer Hints:

1. Critically examine the impact of World Trade Organization rules on the agricultural sector of developing countries like India.

1. The WTO’s Agreement on Agriculture (AoA) aims to reduce agricultural subsidies but disproportionately affects developing nations.
2. Developed countries can provide substantial subsidies, creating an uneven competitive landscape for Indian farmers.
3. Restrictions on domestic support programs like the Minimum Support Price (MSP) limit India’s ability to protect its agricultural economy.
4. Exclusions of sectors like forestry and fisheries from AoA further constrain support available to farmers.
5. Small farmers, who make up portion of the agricultural workforce, face increased vulnerability due to global competition and cheap imports.

2. With suitable examples, discuss how the Minimum Support Price system affects farmers’ livelihoods in India.

1. The MSP provides a guaranteed price for certain crops, ensuring income stability for farmers, especially in Punjab.
2. Approximately 90% of Punjab’s Rabi and Kharif crops are procured under MSP, vital for farmers’ financial security.
3. The system helps prevent distress sales, allowing farmers to invest in better farming practices and technology.
4. However, MSP is capped at 10% of production value, which does not adjust for inflation, limiting its effectiveness over time.
5. Challenges in implementation and bureaucratic delays can hinder farmers from receiving timely payments under the MSP system.

3. Explain the role of the Public Distribution System in ensuring food security in India. What challenges does it face?

1. The Public Distribution System (PDS) provides subsidized food grains to millions, ensuring access to essential nutrition for vulnerable populations.
2. It plays a critical role in stabilizing food prices and supporting the rural economy by ensuring a steady market for farmers.
3. Challenges include inefficiencies in distribution, corruption, and leakages, which undermine its effectiveness.
4. WTO restrictions on subsidies threaten the sustainability of the PDS, as they limit the government’s ability to support food procurement.
5. Additionally, the PDS faces challenges in reaching remote areas, leading to food insecurity for marginalized communities.

4. Discuss in the light of current agricultural policies, how can India balance global trade obligations with the needs of its farmers?

1. India can advocate for reforms in the WTO that allow for more flexibility in agricultural subsidies and support mechanisms.
2. Strengthening domestic policies like MSP and enhancing rural infrastructure can help farmers compete globally without compromising their livelihoods.
3. Engaging in bilateral trade agreements that prioritize the interests of small farmers can create a more balanced trade environment.
4. Investing in technology and innovation in agriculture can increase productivity and reduce dependency on imports.
5. Active participation in WTO negotiations is crucial to ensure that India’s agricultural policies are protected from external pressures.