Memorandum submitted to the Prime Minister of India

Date: 2nd October 2005

To, Shri Manmohan Singh, Honourable Prime Minister of India, Government of India

Subject:  Keep Agriculture out of WTO  

Dear Hon’ble Prime Minister,

You have promised relief to India’s farmers during your very first visit, to Andhra Pradesh to meet families of farmers who had taken their lives due to indebtedness. Farmers’ suicides are not restricted to Andhra Pradesh. Thousands of farmers in different other parts of India including Punjab-the lands of the Green Revolution- are taking their lives.

Agriculture, which is the backbone of Indian economy and the mainstay of the livelihoods of 2/3 of our people, is clearly in deep crisis. This trend has started immediately after agriculture in India has been through open to the world economy and to the multinational corporations and especially since India has joined WTO. We are now paying the cost of liberalisation and globalisation of our agriculture with lives of our brethren farmers –men and women.
The impacts of 10 years of trade liberalisation, globalisation and WTO policies have been felt in each and every state with the states of Andhra Pradesh, Karnataka, Maharashtra and Punjab bearing the maximum burden in terms of the high social and ecological costs in terms of farmers paying for globalisation by being forced to sacrifice their lives and livelihoods.
The burden of the deep agrarian distress caused by the increasing cost of production and declining domestic farm prices due to the increased dumping and declining international farm prices has fallen on the small and marginal farmers of this country. This has led to an spurt in the numbers of suicides committed by farmers in the rural India.
In response to the agrarian crisis and increasing farmers suicide, the Indian Coordination Committee of Farmers Movements, a coalition of farmer unions from across the country, decided to hold a massive protests on 2nd October 2005, on the occasion of Mahatma Gandhi’s birth anniversary, at the Azad Maidan in Mumbai. More than 100,000 farmers from Uttar Pradesh, Rajasthan, Haryana, Punjab, Himachal Pradesh, Madhya Pradesh, Jharkhand, Chattisgarh, Uttranchal, Gujarat, Karnataka, Tamilnadu, Kerala and Maharashtra participated in this protest. The massive protest was against the increased dumping of cheap subsidised agricultural goods and pro-corporate, anti-farmer policies of the Government of India. The UPA government came to power with the mandate from the rural India but now they are coming out with anti farmers and pro-corporation polices, for example the Seed Bill 2004, the Food Safety and Standards Bill 2004, the National Agriculture Policy encouraging contract farming, the dismantling of the Public Distribution System, withdrawal of Minimum Support Price for the most of the commodities, the dismantling of the government procurement system, the reversal of the land reforms for MNCs and agro-businesses, the setting up of the private mandis by ITC and Cargill, and the free import of seeds and plant materials.
Since 1995, when India joined the WTO, there has been a surge in imports of agricultural commodities, which are being dumped by developed countries in the international market below their cost of production. This has led to a deep decline in domestic agriculture prices and has deepened the agrarian crisis in rural India. The bulk of agricultural imports constitute mainly edible oils, pulses (chickpeas, pigeon peas, lentils, dry peas etc.) Other major items imported on a regular basis include dairy products, raw cashew nuts, fruits and raw cotton etc.
The crisis in Indian agriculture is evident from farmers’ suicides in every corner of the country and since 1995 more than 25000 farmers brethren have committed suicides all over the country. This is because of the cascading effect of the capital-intensive, corporate agribusiness-driven, export-oriented, peasant-insensitive domestic policies coupled with the subsidized import surge due to withdrawal of Quantitative Restrictions, which has led to depression in the domestic farmgate commodity prices. The burden of the agrarian distress has fallen on the small and marginal farmers in India. This is a direct result of the WTO’s Agreement on Agriculture that protects subsidies in the developed countries and allows them to dump cheap commodities in countries such as India. Despite this India’s position towards the WTO Hong Kong Ministerial in Dec. 2005 does not reflect the concerns of Indian farmers.
Moreover, the distortions and imbalances in agriculture trade have also drastically affected the prices, incomes and livelihoods of small farmers in India. Since the inception of the WTO, there is a steep decline in the prices of agricultural commodities internationally. From 1980 to 2000, world prices for 18 major export commodities fell by 25% in real terms. During this period the decline was especially steep for cotton (47%), coffee (64%), rice (61%), cocoa (71%) and sugar (77%). For example international cotton prices came down from 128 cents per pound in 1981 to 38.7 US cents per pound in 2002. Similarly rice prices came down from 565 US$/tonne in 1981 to 160.8 US$/tonne in 2002 and sugar prices came down from 18.11 US cents per pound in 1981 to 5.68 US cents per pound in 2002
The world prices of the agriculture commodities have gone down mainly because of the high domestic and export subsidies attached to the developed countries' commodity exports. For example the OECD data shows that in the 25 OECD countries the Total Support Estimate (TSE), a measure of domestic support, rose from US $275.6 billion (annual average for base period 1986-88) to US $326 billion in 1999, while US has given a fresh subsidy of US$190 billion in 2002 under the US Farm Bill 2002.
According to a report, the 2003 US figures show that the agriculture exports from US was sold much below the cost of production:
•  Wheat was exported at an average price of 28 percent below cost of production.
•  Cotton was exported at an average price of 47 percent below cost of production.
•  Rice was exported at an average price of 26 percent below cost of production.
And as long as the subsidies continue, the dumping of artificially cheapened agricultural products to developing countries will continue. This has serious effects on rural livelihoods and food security in countries like India.
Instead of addressing their distorted trade practices, the developed world is putting pressure on developing countries to lower the agricultural tariff to allow fair market access to the developed world and their agribusiness corporations. The agricultural tariff in developing countries is already very low and there is very little capacity to undertake further significant cuts without disrupting their rural economies. Tariffs are the only instruments available to these countries for protecting their farmers.
In India in 1990-91, the average applied rate of import tariff was 113%, which was drastically lowered to 35% in 1997-98 which increased to 41% in 2001-02 but again it declines and in 2004-2005 the average applied tariff is 37.5%. Hence the average applied tariff rate in 2004-05 is almost 65% lower than the average applied rate in 1990-91. Some of the key agricultural goods have the minimum applied tariff rate in India, which include pulses 10%, Maize 15%, milk powder 15% etc.
With the withdrawal of quantitative restriction and reduction in tariff, there is a surge of cheap subsidised imports in India. The import of pulses have increased from 490.75 thousands tonnes in 1995-96 to 1992.8 thousands tonnes in 2002-2003. Similarly import of spices increased from 24.28 thousands tonnes in 1995-96 to 147.69 thousands tonnes in 2003-2004. Import of sugar increased from 29 thousands tonnes in 1996-97 to 932.3 thousands tonnes in 2004-05. Edible oil imports increased from 1061.99 thousands tonnes in 1995-96 to 5290.2 thousands tonnes in 2003-04. Cotton import increased from 2.92 thousands tonnes in 1996-97 to 387 thousands tonnes in 2001-2002.
The dumping of these agricultural commodities led to depression in the domestic farmgate prices which led to a deep agrarian crisis and caused increased cases of farmers suicides because farmers fail to get even their principal capital investment in agriculture.
The Indian farmers demand for the immediate reinstating of the Quantitative Restriction. Reintroducing QRs and increasing tariffs is the survival imperative for the Indian farmers. QRs are a right to defend ourselves from perverse dumping that is leading to genocide. The W.T.O. distortions in our food and agriculture must be removed as a matter of emergency.
The very structure of W.T.O. rules therefore distorts trade against small farmers, against food sovereignty and against trade justice. That is why we have given a call for the removal of agriculture from W.T.O.
In the forthcoming Ministerial in Hong Kong, the Indian government might consider further lowering of agricultural tariff for providing increased market access to US and its agribusiness corporations like Cargill and ADM in order to get a larger share in the H1B visa given by the US. This would be disastrous for the Indian agriculture and its farmers.

What you can do for the farmers?

To stop farmers’ suicides you will need to go beyond compensation to victims’ family. You will need to address the debt creating production packages farmers are being snared into. Your government will need to go beyond “reforms with a human face” and work for the Indian farmers with a human heart and shape economic policy with the farmer’s livelihoods and well being at its center and not for corporation. For rural areas we need farmer oriented reform not corporate driven reform. We need farmer owned, farmer run systems to generate employment and retain added value in rural households and not corporate owned systems which would create rural indebtedness because it is based on unfair terms of trade. The people oriented reforms in agriculture that are needed to get farmers out of the debt and suicide trap is to address the roots of the debt crisis which is high costs of production and unfair prices in the market.

In an interview, you were asked whether the rich countries set the rules of the W.T.O and whether it will be always to the disadvantage of the emerging countries like India. Your reply was, “The international economic game is a power game and those who are strong are always able to lay down the laws of the game.  As I see it, India is not strong enough to rewrite the rules of the world game in its own image. But there are opportunities, and other countries of East Asia have taken advantage of those opportunities of the trading system, which has minus points also”.  You being the captain of Indian team has already conceded a walkover by holding  ‘India is not strong enough’ to resist the present rules of the game. When you have candidly conceded the fact that India does not have any say in the a WTO negotiations and can not change the rule of the game in which our agriculture is getting perished, you may also start a process for walking out of the WTO because when we can not make our voice heard in that forum, there is no need to be present and get perished. We believe that you would accept our request to start a process for getting at least ‘Agriculture out of WTO’ or otherwise “WTO out of Agriculture”. If you cannot do that, you must take some immediate measures which can protect our agriculture from the onslaught of the WTO policies and corporate control. To show the world that India is a powerful country and is capable enough to protect the interest of its farmers, you must follows the following principles in making agriculture policies:
1.  Agriculture in India be governed by the rights and duties enshrined in our Constitution, not by the unjust trade rules of the W.T.O governed by corporations. Agriculture is first and foremost a way of life and source of livelihoods for 75% people in India. It cannot be reduced to a market controlled by global MNCs. We must reclaim our food sovereignty. This should be the main thrust of India's position at the W.T.O. negotiations as well as of the National Agriculture Policy. To protect farmers lives and livelihoods, the government must reinstate QRs, introduce high tariffs to off set dumping of subsidised artificially cheap commodities on domestic markets, and seek exception to W.T.O's market access rules. We must shift from “trade first” to “food first” policy, from ‘MNC first’ to ‘farmer first’ rules. Your government should stop working for the corporations, and should look into the needs of the farmers and not of the corporations.
2. Agriculture is a State subject under the Constitution. The Center should not usurp rights which constitutionally belong to the State. Farmers’ well being depends on fiscal autonomy of States which is a constitutional guarantee. An interference in this autonomy of the States is at the root of the agrarian crisis.
3. Farmers must receive fair and just prices and incomes for the vital work they perform for society in food production. Fair prices require a reintroduction of QRs, given the high levels of subsidies rich countries give for dumping agricultural products. Fair prices also require a minimum purchase price (MPP) independent of whether the buyer is the government, private traders or global MNCs. Price regulation is a duty of the government. Just prices are a fundamental right of farmers. The government should ensure procurement of all agricultural produce for which Minimum Support Price (MSP) has been announced. The Amendments in Agricultural Marketing Act which allows the establishment of monopoly of MNCs over agriculture markets must be repealed
4. MNCs should not be allowed to take over the Indian seed supply system. Farmers’ supply and public sector supply of seed must be strengthened. The Seed Bill 2004 must be scrapped and not at all brought to the Parliament for any discussion. It should be thrown in the dustbin forever. MNCs must be regulated and help liable for seed failure. Seed sovereignty requires a public supply of seed and defense of our seed security.
5. The still pending amendment in the Patent (Third Amendment) Act regarding the microorganisms and GMOs shall never allow patenting of micro-organisms, cells, GMOs because it will bring doom for the Indian farmers and finish of Indian biodiversity and farmers innovation. The Patent Act of 1970 which excludes life forms and agriculture from patentability needs to be reinstated, by repealing the Second and Third Amendments.
6. Agriculture is the primary livelihood of India's people. Livelihood security should be the first and highest objective of the National Agriculture Policy. There must not be any neglect of the livelihood security of farmers and the promotion of agribusiness interests in the NAP. Protecting small farmers' livelihoods must be ensured by the National Agricultural Policy. Most Indians, especially women, children, tribals and landless workers are facing severe food insecurity and nutritional deficiency. Providing nutritious, safe, diverse and culturally appropriate food to every citizen must be another priority of Agriculture Policy.
7. Ecological Security and Biosafety must be the ensured by prohibition of genetically engineered crops from entry into the Indian farms and markets, since these proprietary GM seeds are undermining biosafety and ecological security.

Our Demands:
 Agriculture and food should be kept out of WTO. The import duties on all agricultural products must be increased to stop the flow of subsidized imports. National food sovereignty be protected and food security be seen as National Security.
 Quantitative Restrictions (QR’s) be reinstated to prevent dumping by corporations of artificially cheep and subsidised products, destroying farmers’ livelihoods and the nations’ food security.
 To ensure that farmers get fair prices, a minimum procurement price must be set for all products, and no procurement or import should be allowed below that price. Tariffs and anti dumping measures must be used to ensure that artificially cheap subsidized commodities are not dumped on the Indian market leading to loss of farmers’ incomes.
 The price of agricultural produce must be fixed before the sowing season and scientific price must be guaranteed by the government. MSP be retained to regulate the market prices, both for Government procurement and private trade.
 Farmers should be allowed to sell their produce in all types of markets without payment of tolls.
 The cooperative milk societies should procure all the milk produced by the farmers which is this is the only source of cash for peasants.
 Loan obtained by farmers from formal and informal financial institutions must be waived off. The government should prohibit alienation of land, livestock, agricultural equipment and homes of farmers on account of debt traps as was done in Punjab through the Land Alienation Act during colonial times.
 The genetically engineered seeds and foods must be completely banned in India and no import of GMOs seeds, plants and foods will be allowed.
 The Indian government fix the accountability of the companies for huge losses incurred by Bt. cotton farmers so far. The representatives of all national farmer unions should be invited in all decision-making processes of the GEAC under the Ministry of Environment and Forests.
 The government policy of privatization and commercialization of water resources and handling over management of water supply to the MNCS must be stopped.
 With the increasing water crisis, the government should look for alternative water sources and ecologically viable farming techniques to make efficient use of water in agriculture.
 The farmers should be provided with 24 hrs electricity at a subsidized rate.
 Farmers’ leaders must have representation in the Agricultural Pricing Committee of the Ministry of Agriculture and agriculture price must be fixed on the basis of the cost of production and the cost of living.
 All the cases filed against the farmers involved in civil disobedience agitations all over India should be withdrawn by the center and the state governments.
 Agriculture based village industries should be promoted by the government to guarantee employment to the rural youth to discourage migrations from our villages.
 The ecological farming technologies i.e. organic farming, should be encouraged by the government which will lead to decline in cost of production and improve soil health, productivity and protect farmers from toxics.
 The government change its exclusive focus on corporate agriculture and instead focus its policies on farmer centered and earth entered low lost high output biodiverse organic farming.
 The government should withdraw all perverse incentives to agro-chemical industry and chemical agriculture and put strong disincentives to the use of agrochemicals.

Signed by

Members of the Indian Coordination Committee of Farmers Movements which include

President, Bhartiya Kissan Union (Non-Political), Uttar Pradesh
President, Shetkari Sangathnna, Maharashtra
President, Bhartiya Kissan Union (Non-Political), Delhi
Working President, Karnataka Rajya Ryots Sangha, Karnataka
President, Bhartiya Kisan Union, Punjab
President, Madhya Pradesh Kisan Sangharsh Samiti, Madhya Pradesh
President, Bhartiya Kissan Union (Non-Political), Himachal Pradesh
President, Bhartiya Kissan Union (Non-Political), Rajasthan
President, Bhartiya Kissan Union (Non-Political), Maharashtra
President, Bhartiya Kissan Union (Non-Political), Uttranchal
President, Tamilnadu Farmers Association, Tamilnadu
President, Bhartiya Kissan Union (Non-Political), Haryana
President, Coconut Growers Association, Kerela

Indian Coordination Committee of Farmers Movements
A – 3, Road NO. 2, Jeewan Corner, Mahipalpur, New Delhi – 110037
Tel: 011 – 26782392, 26784000, 09868146405, 09412507451