Home > News > Columnists > Ashwin Mahesh
Power to the forgotten people
May 17, 2004
For long, farmers in rich countries -- the United States, Europe and Japan -- have received hundreds of billions of dollars in subsidies annually from their governments. They need these subsidies to keep themselves in business, because these farmers -- agribusinesses really, not the sort of down-home hardy folks one romanticises about -- are among the least competitive members of that profession anywhere in the world. The World Trade Organisation estimates that 60% of their incomes actually come from these generous hand-outs, and not from selling their produce in global markets.
The trouble with these subsidies is that while they have kept a few people in abundant comfort in developed countries, they have also made it nearly impossible for millions of Third World farmers -- and the even more numerous agricultural workers they employ -- to compete for business in world markets Those suicides you have been reading about in places like Anantapur aren't random tragedies; they are fairly well connected to this rigged system of agricultural trade that supports the prosperity of a few to the detriment of many.
Now, some of that may be about to change. Not because the United States or any of the other nations has decided to finally try fair trade instead of its fantasy version of free trade, but because the fantasy just got exposed for what it is. The WTO, responding to a petition from the Brazilian government, recently ruled that subsidies given to American cotton farmers violate its free trade rules. The US has opted to appeal this ruling, but since the WTO rarely overturns anything on appeal, it is broadly understood that the appeal is simply a delaying tactic in an election year, to put off the inevitable. And if this ruling stands, we will almost certainly see plenty of other lawsuits arguing that all sorts of other subsidies should be disbanded as well.
Translation for farmers in America and elsewhere: roll up your sleeves, it's time for some real work, instead of feeding off the dole. Kudos to the Brazilian government; it is the only administration of a developing nation that appears to back its own interests rather than toe the lines laid for it by the big powers. On visas, IMF loans, and now WTO rules, President Lula da Silva's government has shown far more spine than countless third world leaders have mustered up in half a century. The Indian government would do well to take note.
Certainly, the United States and other countries will find a way around this; usually some collection of tinpots and weak-kneed sellouts from other nations can be assembled to pass pretty much anything the US wants in international bodies. Nonetheless, the WTO ruling, one hopes, will temporarily silence the shrill rhetoric over the outsourcing of white collar jobs from the West to places like India. At the very least, now the United States must change strategy. It was always well known that the farming subsidies are a gross violation of fairness in trade, and that they destroy millions of livelihoods in poorer countries. But trade negotiators in the developed countries were not about to erase them without extracting a price. Which partly explains all that noise over the relatively minor phenomenon of outsourcing. What makes a job 'American', anyway?
The immediate big relief is that the illegal subsidies can no longer be displayed as bargaining chips in trade negotiations. For some time now it has been clear that these subsidies would be lowered only if developing nations opened up their hitherto protected markets -- in insurance and banking, particularly -- to First World corporations. That was always devious -- it's a bit like releasing a hostage in exchange for a ransom and calling that a mutually advantageous negotiation. The WTO ruling has put paid to that deceit, by simply stating the obvious -- rich countries have no right to take hostages in the first place.
New Delhi should seize this moment to appeal against other subsidies that wealthy countries provide to their farmers. Cotton farming should have been a big deal to us too, not just the Brazilians. But better late than never; it is time to get on the bandwagon of challenging handouts in Washington and Brussels. Sadly, the record of late has been dismal. The guardians of the Indian national interest have been busy acting as henchmen for foreign agribusiness interests instead of protecting our farmers. The disregard for public health and livelihood so far demonstrated by New Delhi and the State-sponsored agricultural 'research' community is appalling. In Andhra Pradesh, which has swallowed the free-trade bait more wholly than any other state in the country, the voters have reminded the government where its loyalties should have been these past few years.
In many respects, the elections in Andhra are the only ones that can actually be deciphered fairly unambiguously. This is a state where voters had the opportunity to back or reject very specific policies offered to them. Everywhere else, the electorate could only respond to various degrees of unknowns -- about Hindutva, about the prime minister's post, global trade, etc -- as politicians prefer to leave more unsaid than declared. More than any other politician, Chandrababu Naidu has been identified with the terms of progress celebrated in the English media and in the corridors of power. His defeat should give the cheerleaders pause.
The plain truth is that whether we acknowledge it or not, we are still, by and large, a nation of farmers and agricultural workers. And lasting national economic progress requires that we defend the interests of this majority of the population strongly. It is easy to forget this amidst the hype over urban development, and thereafter wonder at the 'recklessness' of voters rejecting the leaders we've been extolling in our living rooms.
State policies that assume rural development will occur only when urban prosperity slowly trickles out into the countryside show neither economic nor political sense. Communities thrown to the winds by un-mandated deals made on their behalf but without their consent have been left to hope for rare common sense developments -- such as the recent WTO ruling -- to find some relief.
Such fortunate outcomes, however, are no guarantee of long-term well-being. That can only be achieved by diligent political leadership that engages real problems and avoids discredited theories of trickle-down prosperity.