- Integrating Global Trade in Agriculture with Human Rights - October 13, 2017
- The buzz words of the nineteen nineties were ‘liberalization’, ‘privatization’ and ‘globalization’. Trade was globalized, be it trade in goods, services, intellectual property, investment or agriculture. Has globalization of agriculture secured the Indian masses food and livelihood security or has it resulted in widespread and chronic hunger, malnutrition and sickness? After briefly tracing the genesis of globalization and birth of WTO on 1 January 1995 and inclusion of agriculture in WTO agenda, the Paper first scrutinizes the deleterious impact of market access, domestic subsidies, export competition provisions of the Agreement on Agriculture under the WTO regime before critically examining the effect of the WTO TRIPS Text provisions relating to patenting/protection of plant varieties on food security of the nation, rights of farm families and indigenous communities, and our genetic resources and traditional knowledge. The paper concludes by suggesting the need to revisit the WTO Treaty and ensure that global trade in agriculture is human rights based.
- The genesis of globalization can be traced back to Bretton Woods Conference of 1944. The Conference resulted in the establishment of new organizations such as World Bank, International Monetary Fund and the General Agreement on Tariffs and Trade [GATT]. The GATT culminated in the formation of the World Trade Organization [WTO] on 1 January 1995. The WTO Agreement covers trade in goods, services, intellectual property, investments and agriculture. India is a member of WTO.
- When GATT was established the advanced nations, by mutual consent, had excluded trade in agriculture from the purview of GATT. But by 1980, almost one third of the agricultural produce in both – the US and the EU — was for export as both the groups heavily subsidized the production and export of agriculture. But the demand for agricultural products in the world started declining due to self-reliant policies pursued by some countries and balance-of-payment problems in other countries. This resulted in a trade war between the two gigantic agricultural exporters. The US, having a comparative edge in agriculture, introduced the subject of agriculture in the Uruguay Round. Thus the idea of liberalization of agriculture did not arise out of any concern for the millions who go to bed on an empty stomach. It was the intense
*Dr. Nilima Chandiramani, Principal, Nari Gursahani Law College, & Former Dean, Faculty of Law, University of Mumbai.
agricultural trade rivalry between the two blocks that necessitated the introduction of the subject of agriculture in WTO.
- India is a country of villages. Hence importance of agriculture cannot be undermined. Though the share of agriculture in GDP has fallen from thirty five percent in 1991 to fourteen percent in 2015, it yet provides livelihood to sixty five percent of the population. Over the years our farmers, diligently and tirelessly, built a strong foundation for agricultural development. From being a net importer of agricultural products, the country went on to become self-reliant and then an exporter of food products. Hence for India, agriculture is not a subject of trade. It is a source of survival and employment for the masses.
- But the provisions of the WTO Agreement on Agriculture relating to minimum market access, domestic subsidies and export competition have dealt a severe blow to Indian agriculture, the food security of the nation and livelihood of the farmers. The situation has aggravated due to patenting of plant varieties and plant breeders’ rights under the TRIPS Agreement, resulting in denial of rights of our indigenous farming communities, piracy of our bio-diversity and traditional knowledge, and erosion of our genetic resources.
Agreement on Agriculture [AoA]
- The AoA mandated a minimum commitment on market access to agricultural goods of member countries. India had therefore to import a minimum proportion of agricultural products, including food grains. Consequently we were enjoined to replace all types of non-tariff barriers such as quantitative import restrictions, variable import levies, minimum import prices, discretionary import licensing, non-tariff measures maintained through state-trading enterprises, etc., with ordinary customs duties; and then to reduce these customs duties under a time bound program.
- India announced several import incentives and permitted import of hybrids of coarse cereals, oilseeds, pulses, fodder, etc. Import of planting materials and seeds of vegetables and fruits were directly allowed. Items freed of quantitative restrictions were fish, milk, coconut, coffee, spices, tea, ragi, bajra, neem products and even basmati rice. Worse still we were asked to open up our markets even before the elimination of food subsidies by the food exporting countries. The inability to insulate our markets from artificially cheap imports caused a further deluge of apples, oranges, kiwi and a multitude of exotic fruits from different countries. This market access has destroyed the local markets, intensified poverty and inequity within rural areas and between rural and urban areas. Agriculture not being a viable option, the number of farmers in India has fast dwindled, threatening the food self sufficiency of the nation.
- The Special Product Protection [SPP] and the Special Safeguard Mechanism [SSM] under Article 5 of the AoA are an eye-wash. Though under SPP, a country can protect agriculture by designating some agricultural product lines as special products on consideration of food security, livelihood and rural development; and can declare these product lines outside the ambit of tariff reduction formula, India grows hundreds of crops, each of which is linked to the livelihood of thousands of small farmers. How many special products can India designate? And how many of these designated products will be permitted by the food exporting countries? Similarly SSM, which provides a country the right to deal with sudden surge in imports that harm the interest of farmers, is merely a temporary measure to be adopted only in an emergency. Moreover whenever these issues are raised by developing agricultural countries at the ministerial conferences of WTO they go unheard and un-addressed. The last ministerial held at Nairobi in December 2015 bears testimony to this fact. It is ironical that countries with industrialized agriculture, growing fewer agricultural products, have used these provisions and protected their agriculture, thereby further hitting at the already declining exports from India. And this is despite the ‘special and differential treatment for developing countries’ stipulated in the AoA under which developing countries are to have more market access in the developed world markets.
- Regarding domestic support/subsidies, the AoA ordained that the aggregate measure of support [AMS] to agriculture given by a member State should not exceed ten percent of its value of agricultural production in the case of a developing country and five percent in the case of a developed country. Where the support exceeded the prescribed percentages the members were required to reduce it so as to be in conformity with the provision.
- The points to be noted are: one, an agricultural country like India, where there are 263 millions of small and marginal farmers, supports agriculture to ensure food security and employment for its masses and not for exporting its agricultural produce.
- Two, the base year for pricing of food grains is pegged at 1986-88 prices i.e. thirty years old prices. After 1988 the prices of food grains have gone up astronomically. So India is bound to breach the subsidy cap, even if it has not done so far. To ensure food security to masses and to assure price support to farmers, India purchases rice and wheat (at a higher price) from the farmers at rates fixed administratively under the minimum support price program. This is then supplied to ration shops for distribution to below the poverty line households at a low price. The difference between the two prices is treated as subsidy and this subsidy should not exceed ten percent of the value of production in 1988, when prices were obviously much less than they are now.
- Three, why should subsidies provided for public stockholding be included in the calculation of AMS when green box measures used by countries with industrialized agriculture have been exempted from inclusion in the calculation of AMS? The developed countries too had to reduce their hefty subsidies. But they circumvented this provision by providing blue and green box subsidies. And by juggling the subsidies from one box to other they have actually succeeded in increasing the subsidies manifold.
- Four, under the special and differential treatment provision India is allowed to procure and sell the public stockholding at an administered price. But at Nairobi meet pressure was exerted on India to slash its food support and to purchase and sell the public stockholding at current global market prices and not at the rates fixed administratively. And the current global market prices, due to enormous amount of farm subsidies, are artificially depressed.
- It warrants noting that these trade distorting domestic subsidies, which were promised to be eliminated at the Uruguay Round, have more than doubled and are even being given to non food crops such as cotton and tobacco and further they are being enjoyed by the rich farmers too in the developed nations. It is these mammoth subsidies that have totally crippled Indian agriculture and deepened the distress of the resource-poor and subsistence farming families. India can export its agricultural goods only if the international prices are not artificially depressed. This inability to export coupled with the compulsion to import has entailed an epidemic of kidney sales and suicides by our farmers.
- The thrust of WTO is on exports. The AoA is no exception to this rule. The undue and unfruitful emphasis on exporting agricultural products from India has decreased the food supply for the masses living and working in the rural areas. The desirability of exporting agricultural produce in large quantities to earn foreign exchange is itself questionable – given the widespread poverty and hunger prevailing in India. Even today we are self-sufficient to the extent that those who can afford food can have it. Millions of Indians go hungry to bed every night. Thousands have died of starvation. Article 12 of The International Covenant on Economic, Social and Cultural Rights recognizes the right of everyone to be free from hunger and to enjoy an adequate standard of living, including adequate food. The same right is also recognised by Article 25 of The Universal Declaration of Human Rights.
- Moreover, the efforts to promote export agriculture have resulted in agricultural production having shifted to commercial and exportable crops. Food crops have been replaced by cash crops, fruits, vegetables, aquaculture, etc. Thousands of local but nutritious staples, coarse grains, legumes, lentils, etc., have become extinct. Some tribal communities, which once survived on maize, have been compelled to change over to cash crops. This shift from food crops to commercial crops has had a disastrous result on the livelihood of small and marginal farmers as well as on the food security of the country. The total area under food grains has declined with a corresponding increase in area under non-food grain crops. This has threatened the food security of the poorer sections of the Indian society. The heart- rending Bengal famine during the British period was the result of emphasis on export oriented agriculture, namely indigo.
- Further, exporting agricultural produce from India is extremely difficult. Even if we succeed in entering the highly cartelised market, the international prices fall. The massive subsidies given to domestic farmers in industrialised countries generate over-production. The resulting surpluses are dumped in world markets with the help of yet more subsidies. These highly subsidised exports from rich countries drive down the prices for exports from developing countries, devastating the prospects of small and poor farm families.
- Further still, export agriculture is capital intensive and beyond the reach of a small farmer who lacks not only the infrastructure to take advantage of market openings but also access to productive assets such as land and credit. Life styles have changed. There is a demand for processed, ready-to-cook and fast foods, and not for raw food grains. Technical tie-up with MNCs – which have entered Indian food processing industry – is an essential pre-condition to sell our products in the global markets. Our farmers have thus been reduced to mere suppliers of raw agricultural materials to these huge corporations, who lap up the profits. The ban on seafood exports from India was a culmination of a calculated move to prevent the Indian exporter from diversifying into export of cheap, cooked, processed and value- added seafood; and to restrict him to exporting only raw seafood which is converted into value added food by such corporations and then sold in the international markets at exorbitant rates! Above all, even the meagre Indian gain became uncertain because of the stringent sanitary and phyto-sanitary norms; social barriers; green barriers and other protectionist measures adopted by the advanced countries. One has merely to recall the ban on export of Indian goods on account of so called ‘Surat plague’, ‘inflammable skirts’, ‘carcinogenic garments’, ‘child labour employed in carpet industry’, ‘fishing vessels not equipped with turtle excluding devises’. Examples such as these can be multiplied.
Patenting/Protection of Plant Varieties under the TRIPS Text of WTO
- Article 27.3 (b) of the TRIPs Agreement outlines the obligations of WTO member countries vis-à-vis plant variety protection. The member countries are to provide for the protection of plant varieties either by patents or by an effective sui generis system such as plant breeders’ rights under UPOV. This has devastated our farming families by depriving them of their right and control over the seeds. It has also legitimized piracy of our rich genetic resources; and ignored the pivotal role of indigenous communities in conservation of biodiversity and generation of traditional knowledge. Further, it has lead to erosion of our genetic resources.
- Plants are not inventions. They are products of nature. They do not qualify for grant of patents. By sanctifying patenting of plant varieties and seeds the Text affects the availability of seeds, bio-fertilizers and bio-pesticides to poor farmers at affordable prices. The seed corporations have sought total control over the seed, the first link in the food chain. Biotech companies have patented several genetically engineered plant varieties of coffee, pepper, cauliflower, cabbage, mushrooms, melons, peas, etc. Terminator seeds have been developed. Once the seed is patented the farmer loses his right to modify, retain or use his seeds. He becomes dependent on the patent holder or plant breeder for his seed requirement. Consequently the price of seed escalates. In India when W. R. Grace obtained a patent on a product which required the use of the pesticidal extract, azadirachin, from the Indian neem tree, the price of neem seed shot up from rupees 300 per ton to rupees 4000 per ton.
- The very thought of patenting plant varieties/bio-diversity was obnoxious to India as it creates monopolies in area of food and fails to recognize the farmer’s contribution to conserve and make available the genetic resources. Consequently The Indian Patent Act, even after its amendment in 2005, does not permit patenting of plant varieties. However as we had to accord protection to plant varieties under the TRIPS Text either by patenting them or by adopting a sui generis system, we enacted The Protection of Plant Varieties and Farmers’ Rights [PPV&FR] Act in 2001 in order to be TRIPS compliant. Rules were issued in 2003 and the Central Authority which was entrusted the implementation of the Act was established in Delhi in 2005. Applications for registration and protection were received in 2007 and the registrations of plant varieties began in 2009. The Act deals with the varieties that that can be protected by registration; persons who can apply for registration; requisites of application for registration; period of protection; refusal and revocation of protection; compulsory license; breeders’ rights; farmer’s rights not only as a cultivator but also as a conserver, preserver and improver of genetic resources; researcher’s rights and community rights. Enacting the law is a step in the right direction but there are some lacunae in the law which must be plugged to make it a more farmer-friendly law.
- The TRIPS Text has also legitimized piracy of our abundant genetic resources and ignored the pivotal role of our indigenous farming communities in conservation of biodiversity and generation of traditional knowledge. Bio-diversity is found in the poor and resource-starved farmer’s field. The small scale subsistence Indian farmer under the traditional low input farming system and mixed cropping pattern has maintained and generated bio-diversity. From time immemorial our farming communities identified, domesticated, improved, conserved and developed plant species. Not only did they create the basis of agriculture by producing rice, wheat, cotton and other cash crops by breeding wild forest plants, but they also identified important traits such as high yield, disease resistance, resistance to water logging, salt and heat, and drought tolerance in these plants. Each farmer shared his innovations with others without maintaining a record as to who innovated what. Hence genetic research and knowledge of bio-diversity in India was considered as farming community knowledge. But in the restructured and globalised economy our pool of rich genetic resources and our traditional knowledge was pirated by formal innovators who were gigantic corporations. The genes from our plants, which constituted the raw material for developing new agriculture and medicine, were re-shuffled after a minor modification and converted into intellectual property over which these corporations claimed exclusive rights. During the mid nineties, Delhi customs officials found a Bavarian entomologist and a forest officer smuggling out of India four large cardboard boxes of 30000 neatly packed insects, moths, butterflies, grasshoppers and ants. These were to be put to commercial biotechnical applications in Germany. It is ironical that India was neither paid for her genetic material nor permitted to use that same genetic resource to create similar application. We had to pay hefty price for the products created from our genetic resources found in our eco system. One has to only recall patents granted by the United States Patent and Trade-mark office on karela, jamun, brinjal, turmeric (later cancelled), neem, basmati, etc. Such patent grants ignore the fact that the medicinal properties of these plant varieties form part of common traditional knowledge in India.
- According to a UNDP Report, eighty per cent of the world’s population, for its food and medicinal needs, depends on the knowledge of indigenous communities. The Report cites more than hundred cases where developed countries have benefited from the bio-resources and the indigenous knowledge of developing countries. And this benefit to the developed nations has been free of cost, without compensating the farm communities either for their bio-resources or traditional knowledge. And this is despite the fact that The Convention on Biological Diversity and The International Treaty on Plant Genetic Resources recognise and reiterate the sovereign right of the nations and their farmers over their genetic resources; protection of indigenous knowledge and traditional life styles; and provide for an equitable sharing of benefits arising from such resources.
- Patenting of seeds and plant varieties has also resulted in erosion of genetic resources and a drastic reduction in diversity of food crops, as fewer varieties are monopolised by the seed corporations. The anxiety to develop improved plant varieties and seeds has resulted in extinguishment of traditional varieties, contributing to shrinkage in the genetic diversity of cultivated species. India could once boast of possessing the largest diversity of cultivated crops in the world. One species of mango had diversified into at least one thousand varieties and one species of rice into eight hundred varieties.
25. The rules of WTO in general and those of Agreement on Agriculture and TRIPS Text in particular are rigged and smack of double standards and hypocrisy. Consequently global trade in agriculture has been lopsided and inequitable. On the one hand it has destroyed our agricultural base and made our farmers ‘labourers’ and pried open our food markets by artificially cheap subsidized imports; and on the other hand it has resulted in marginalization of the poor and indigenous farm families; encouraged and legitimized piracy of our rich genetic resources and entailed genetic erosion. It has disrupted the entire process of agricultural development in India and undermined our food security and livelihood of the farming community. Every country should have the right to evolve agricultural policies that are suited to its national interests and are conducive to the well-being of its masses. There is a need to revisit the WTO Treaty and ensure that global trade in agriculture is human rights based.