Free trade can’t yet pass a basic food security test
PremiumThe Ukraine war has caused a global food shortage and shown how fragile overseas trade arrangements are. The WTO must not carp if India puts its own nutritional security first
Food has always travelled the world, mixing flavours and palates through trade routes. In a perfect world, just as the free exchange of ideas, goods and services broadens prosperity and enlarges the pie for all, a global market for farm output freed of distortions would ease hunger and maximize nutrition by letting crops flow from zones of abundance to regions of scarcity. But a world riddled with barriers has only worsened after the Ukraine War. Trade has been weaponized for geopolitical aims, pushing borderless ideals further out of reach. The war also produced a wheat-supply squeeze, even as farm input costs soared. With over two-thirds of humanity living in countries that are net importers of food, the United Nations recently estimated that 276 million people are at risk of starvation. Food security is thus high on the agenda of the 12th World Trade Organization (WTO) ministerial conference in Geneva. It is a fractured forum, yet to recover from former US president Donald Trump’s sabotage, most alarmingly of its dispute resolution system. And agriculture has always been the final frontier of trade, given national anxieties over food sufficiency. Can we really expect progress?
Not only was India criticized for its ban of private wheat exports to stem a price flare-up, our regular policies remain in the WTO cross-hairs. As fair trade requires a level playing field, the elimination of distortive subsidies is held up as a key enabler. As global analysts see it, we warp foodgrain production by means of a massive food security programme that involves harvests procured from farmers at prices not determined by the market. While it is true that this imposes ecological costs, results in a fiscal bloat and keeps grain supply out of sync with demand—think of rice gluts—it is our only backup for covid-clobbered multitudes on the verge of hunger. Without market-oriented farm reforms, we cannot afford to accede to any rule that would have us cap the state’s subsidy to a tenth of production cost. The catch: this 10% limit was calculated based on prices of 1986-88, when food was much cheaper. It was always untenable, a legacy of lopsided rule-making that placed burdens on developing economies while the rich world found various props for its own farms. Even now, the per capita subsidy that a farmer in the developed world gets is over 10 times what an Indian cultivator gets. In 2013, at the Bali meet, India had threatened to derail talks on this count; a tentative “peace clause" since then grants us immunity from being charged with rule violation. Today, the WTO’s subsidy rulebook needs an update for changed circumstances. Importantly, norms on food stockpiles need to be realistic enough to offer us autonomy on assuring our people food security.
This year, India is expected to reiterate its call for a lasting solution to that problem. We are looking for a permanent exemption that allows public granaries, a demand that many other developing nations have echoed. For this, we should not be branded as enemies of the greater global good. No doubt, in general, India must foster free trade. But adapting our farm sector to market forces is no easy project, as we recently saw (in a flawed attempt). Moreover, we have nutrition deficiencies of our own to worry about, even as the trust needed among nations for ideal trade arrangements has been wearing thin. With the US stuck on “America first", the world lacks a champion of trade that can soften borders in low-impact areas before we can all take down primary-sector fences.