Articles by Dr. Shiva

How Ten Years of WTO have Created an Agrarian Crisis in India

by Dr. Vandana Shiva

WTO : An anti democratic Agenda Beyond Trade  

The WTO came into existence as an outcome of the Uruguay Round of the General Agreement on Trade and Tariffs (GATT). The Uruguay Round changed the definition of Trade dramatically. In the pre-WTO period, international trade rules, governed trade in goods, outside national borders. WTO became an undemocratic instrument for interference in domestic economies, and not just change the nature of trade, but the nature of production, and social and political patterns through which societies govern themselves. Trade and Commerce were disembedded from society and democracy. New issues introduced in the Uruguay Round such as intellectual property, food and agriculture, services and investment are actually a redesigning of society to suit corporate interests, without the consent of people.  

Global trade rules, as enshrined in the World Trade Organisation (WTO) Agreement on Agriculture (AOA) and in the Trade Related Intellectual Property Rights (TRIPs) agreement, are primarily rules of robbery, camouflaged by arithmetic and legalese. In this economic hijack, the corporations gain, and people and nature loose. During the Uruguay Round, India led the resistance against the introduction of new issues. The Uruguay Round was concluded through a non-negotiated, take-it-or-leave-it text drafted by Arthur Dunkel, the then Director General of WTO.  

The global reach of corporations to take over the resources of the poor of the Third World is made possible not just by reduction and removal of tariffs, one of the goals of the WTO. It is facilitated by the removal of ethical and ecological limits on what can be owned as private property and what can be traded. The WTO's overall goal of promoting “market competition” serves two functions. Firstly, it transforms all aspects of life into commodities for sale. Culture, biodiversity, food, water, livelihoods, needs and rights are all transformed and reduced to markets. In this way, globalisation is completing the project of colonization that led to the conquest and ownership of land and territory. Biological resources and water, the very basis of life's processes, are being colonized, privatized, and commodified.  

Agriculture, which is still the primary livelihood for three quarters of humanity and two thirds of India, and which is as much a cultural activity as an economic one, is also threatened by “trade liberalization”, driven both by the structural adjustment programs of the World Bank and the IMF, and by the WTO's Agreement on Agriculture. The globalisation of food and agriculture systems, in effect, means the corporate takeover of the food chain, the erosion of food rights, the destruction of the cultural diversity of dood and the biological diversity of crops, and the displacement of million from land-based, rural livelihoods.  

WTO Disputes : Dismantling People's Rights to Seeds and Food

  Two of the earliest WTO disputes were brought by the U.S against India. The first was the TRIPS dispute which forced India to change its patent laws, the second was the QR dispute, which forced India to remove its protection against dumping and cheap imports.  

TRIPS and Seed Monopolies  

To understand the flaws of TRIPS, it is important to know that this agreement is essentially the globalisation of western patent laws that historically have been used as instruments of conquest. The word “patents” derives from “letters patent” – the open letters granted by European sovereigns to conquer foreign lands or to obtain import monopolies. Christopher Columbus derived his right to the conquest of the Americas through the letter patent granted to hum by Queen Isabel and King Ferdinand.  

The U.S Patent Laws are based on take over of knowledge. One outcome was that broad patents were granted in the United States for steamboats – inspite of the steam engine having been invented and patented by James Watt in Scotland fifiteen years before.  

The United States has continued to ignore the pre-existence and use of inventions in other countries when granting patents. Thus, paradoxically, a legal system aimed at preventing “intellectual piracy” is itself based on legitimizing piracy. This system is codified in Section 102 of the U.S Patent Act of 1952, which denies patents for inventions that are in use in the United States but allows patents for inventions in use in other countries unless they have been described in a publication. If, for example, someone in Europe were operating a machine and you, in good faith, independently and without knowledge of its existence, developed your own invention that was essentially the same machine, that fact would not prevent you from obtaining a patent in the United States.  

In addition, the United States has created unilateral instruments such as clause Special 301 in its Trade Act to force other countries to follow its patent laws. Thus, a country that depended on borrowed knowledge for its own development of industrial power has acted to block such transfer of knowledge and technology to other countries.  

Introduction of TRIPS

During the Uruguay Round of the GATT, the United States introduced is flawed patent system into the WTO, and thus imposed it on the rest of the world. U.S corporations have admitted that they drafted and lobbied on behalf of TRIPS. As a Monsanto spokesman said “The industries and traders of world commerce have played simultaneously the role of patients, the diagnosticians, and prescribing physicians”.  

TRIPS not only made Intellectual Property Rights (IPR) laws global geographically, but also removed ethical boundaries by including life forms and biodiversity into patentable subject matter. Living organisms and life forms that are self-creating were thus redefined as machines and artifacts made and invented by the patentee. Intellectual Property Rights and patents then give the patent holder a monopolistic right to prevent other from making, using or selling seeds. Seed saving by farmers has now been redefined from a sacred duty to a criminal offence of stealing “property”. Article 27.3 (b) of the TRIPS agreement, which relates to patents on living resources, was basically pushed by the “Life Science” companies to establish themselves as Lords of Life.  

The chemical companies of the world have bought up seed and biotechnology companies and reorganized themselves as Life Science corporations, claiming patents on genes, seeds, plants and animals. Ciba Geigy and Sandoz have combined to form Novartis, Hoechst has joined with Rhone Poulenc to form Aventis, Zeneca has merged with Astia, Dupont has bought up Pioneer HiBred, and Monsanto now owns Cargill seeds, DeKalb, Calgene, Agracetus, Delta and Pine Land, Holden and Asgrow. Eighty percent of all genetically engineered seeds planted are Monsanto's “intellectual property”. And Monsanto owns broad species patents on cotton, mustard, soyabean – crops that were not “invented” or “created” by Monsanto but have been evolved over centuries of innovation by farmers of India and East Asia working in close partnership with biodiversity gifted by nature.  

The disastrous impact of WTO in creating seed monopolies has already been felt in India. India's 1970 patent act has been amended three times and there is an attempt to introduce a new seed law which would destroy biodiversity and farmers rights.  

The epidemic of farmer's suicide is the real barometer of the stress under which Indian agriculture and Indian farmers have been put by globalisation of agriculture. Growing indebtedness and increasing crop failure are the main reasons that the farmers have committed suicide across the length and breath of rural India. The suicides by farmers highlights these high social and ecological costs of the globalisation of non-sustainable agriculture which are not restricted to the cotton growing areas of these states but have been experienced in all commercially grown and chemically farmed crop in all regions. While the benefits of globalisation go to the Seeds and Chemical Corporation through expanding markets, the cost and risks are exclusively born by the small farmers and landless peasants.  

Globalisation and privatization of the seed sector have eroded farmers seed supply and seed supplied by the public sector. While the entry of private seed companies is justified on grounds of increasing farmers options and choices, by making farmers look down on their own varieties as inferior and by eroding the capacity of the public sector, globalisation has in effect created a seed famine. Monopolies have contributed to farmers suicides as we analyse in our report “Seeds of Suicides”.  

As a consequence of the farmers suicides and high seed costs, the Andhra Pradesh Government brought a case against Monsanto / Mahyco before the Monopolies and Restrictive Trade Pracitses Commission (MRTPC).  

Monsanto enjoys a monopoly on production, supply and marketing of Bt. Cotton seed in India. The firm operates through its subsidiary – Mahyco. From the last few years, the company has been charging a ‘trait value' (price fixed for research and development on Bt. Cotton seed, which can resist local pests) at Rs. 1750 per pack of 450 grams of seed.  

The MNC gets the seed for Rs. 300 per pack of 750 grams from the farmers who grow it under the company's supervision. The government has challenged the validity of the ‘trait value' in the court and demanded its abolition. The government has also demanded Rs. 400 crore from the company, which it collected from the farmers.  

The MRTPC directed the Mahyco-Monsanto to reduce the ‘trait value' to a reasonable extent. The MNC tried to approach the Supreme Court to stay the order of the MRTPC. But, the apex court refused to grant a stay.  

Meanwhile, the Andhra Pradesh Government had convened a meeting of the seven other states – Orissa, Karnataka, Maharashtra, Tamil Nadu, Madhya Pradesh, Punjab and Haryana. It was decided in the meeting to bring pressure on Monsanto to reduce the price of Bt. Cotton seed so that farmers are not over burdened by the exorbitant price.  

The Andhra Pradesh Government's contention is that the high price of the Bt. Cotton seed is one of the reasons for distress among farmers. More than 2000 farmers committed suicide in the last eight years in Andhra Pradesh alone and most of them were cotton growers.  

In a parliamentary debate the Government admitted the more than 100,000 farmers had committed suicide in the last decade. Rising costs of seeds and other inputs, combined with falling prices of agricultural commodities are the primary caused of indebtedness and indebtedness is the primary cause of farmer's suicide. Both the rise in costs of production and decline in prices of farm produce are driven by the trade liberalization rules of WTO.  

AOA, Renewal of QR's and Falling Farm Prices

  All over the world, structural adjustment and trade liberalization have already driven millions of farmers off the land because of rising costs of production and collapsing prices of commodities. Instead of supporting policies that help farmers survive, WTO rules are driving small farmers to extinction and ensuring that agriculture is controlled by global corporations.

  The Agreement on Agriculture (AOA) of the WTO is a rule-based system for trade liberalization of agriculture that was pushed by the United States in the Uruguay Round of the GATT. However, these rules are the wrong rules for protecting food security, nature and culture. Instead, they are perfectly shaped for the objective of corporate rule over our food and agriculture systems.

The AOA rules apply to countries, even though it is not countries for their farmers that engage in global trade in agriculture but global corporations like Cargill. These firms gain from every rule that marginalizes farmers by removing support from agriculture. They gain from every rule that deregulates international trade, liberalises exports and imports, and make restrictions of exports and imports illegal. Market openings through the AOA are therefore market opening for the Cargills and Monsantos.

  The outcome of negotiations for the AOA should not be surprising, because global agribusiness corporations held tremendous influence over the negotiations. In fact, the U.S delegation was led by Clayton Yeutter, a former Cargill employee.

  There are three components to the AOA  

• Domestic Support
• Market Access
• Export Competition  

The WTO dispute to remove QR's was the means to get across to India's markets. However, since the rich countries subsidies their agriculture upto $ 400 billion annually, removal of import restrictions amounts to removing the protection against cheap imports and dumping. As a result of subsidies, prices of agricultural commodities have been falling worldwide.  

The crisis in cotton, is an example of the agrarian crisis created by globalisation. The worst suicides are taking place in the cotton belts of Vidharbha, Andhra Pradesh, Karnataka and Punjab. More than 70 countries globally produce and export cotton. Of these, eight countries are responsible for almost 80 percent of global output. The world's cotton market is dominated by the US – which is the second largest producer. Support to the cotton sector is greatest in the US, followed by China and the EU. The combined support (domestic and export subsidy) provided by the US government to cotton producers is pegged at $ 4 billion.

The US subsidy system is based on direct payments to farmers who can sell cotton in world markets at prices well below the cost of production. Production costs are $ 1.70 per kg but its cotton is sold at $ 1.18 per kg. Export subsidies for 2005-2006 amount to $ 360 million.

  The worst losers are farmers in the least developed countries. This subsidy is helping only a few thousand farmers in the developed nations but is putting millions of poor Africans and Indians into a death trap. For example the $ 4 billion subsidy that the US gives is only meant for 20,000 farmers who cutivate cotton.

Meantime, falling cotton prices are creating $250 millilon increased poverty in central African countries such as Burkua Faso, Chad, Mali and Tago. And in India, falling cotton prices driven by removal of import restrictions are killing our farmers. Before 1990 cotton import and export was totally controlled by Central Government. After the formation of WTO in 1995, cotton import and export is free. But we could not export cotton as prices in international market has fallen to one third from what was it was in 1994. The cost of production in America of 1 kg of cotton lint is not less than 1.8$. But it is sold in international market at 1$ per kg. This is why cotton farmers in India are committing suicides.

Traditionally, India has been a net cotton exporter. But by 1998, it emerged as a major importer due to policy changes. Imports were liberalized when the Cotton Corporation of India import monopoly was terminated in 1991. Now imports are subject to the Open General License, allowing unrestricted imports by private traders.

The story of falling prices is repeated in spices, edible oil, dairy products. Suicides of Wynad farmers are directly connected to imports of spices. According to the Government of Kerala, falling prices have led to losses of Rs. 2958 crores for coconut farmers, Rs. 695 crores for pepper farmers, Rs. 924 crors for arecanut farmers, Rs. 388 crore for coffee growers and Rs. 178 crore for tea grower and Rs. 70 crore for cardamom growers in 2000-2001. In India, agricultural imports have gone up by 300% in the last decade. While edible oil imports have increased by 398%, cotton imports have multiplied by a whopping 13,153%. Sugar, fruits and vegetables and spices are some other commodities that have poured in unchecked.

For all agricultural commodities, our study “The Mirage of Market Access” assesses that falling prices due to imports have led to annual looses of Rs. 116200 crores of Indian farmers.

Changing the Trade Rules  

The growing agrarian crisis we are experiencing, with farmers suicides as the most tragic expression of the crisis, is a direct result of WTO rules and the trade liberalization paradigm. It is an imperative to change these rules to allow for the protection of Indian farmers against cheap imports. This requires reintroducing QR's. We also need to be able to promote national and local food security policies. Food and Agriculture are issues of livelihood and basic needs, not mere matters of trade. Across the world, people are calling for removing Agriculture from the WTO.  

Similarly, WTO is the wrong place to create rules for intellectual property. TRIPS too needs to be removed from WTO. This is the suggestion from experts and the call of the movements like the “Indian People's campaign against WTO” convened by Mr. S.P. Shukla, who was Ambassador to GATT during the Uruguay Round.  

WTO is in deep crisis because it imposed unjust and asymmetric rules on the South. The Seattle ministerial failed because of people's resistance. The Doha Round was negotiated in the shadow of 9/11. Cancun failed because the south organized under the G-20, with India as a leading player, and the G-90 the group of least development countries. Hong Kong too would have failed, but India and Brazil joined the rich countries to produce a disastrous draft. The emptiness of the promises made in Hong Kong were born out by the failure of the WTO negotiations in July 2006.  

The Doha round negotiations collapsed once again at the Mini Ministerial in Geneva on 23^rd July 2006. Martin Khor of Third World Network reported from Geneva that when asked of the Doha Round is dead or in intensive care, Mr. Kamal Nath, India's Commerce Minister, said it is somewhere between intensive care in hospital and the crematorium.  Peter Mandelson, the EU Trade Commissioner told the press following suspension of WTO negotiations, “we have missed the last exit on the motorway.”  

The U.S. is being identified by all as responsible for the collapse of talks, by its refusal to reduce its agricultural subsidies. The US and its corporations were the driving force behind two agreements of the Uruguay Round, which have the highest impact on the poor of the Third World. The Trade Related Intellectual Property Rights (TRIPS) Agreement has increased the cost of seeds and medicine by promoting monopolies. Thousands of Indian farmers have committed suicides due to debts resulting from a new dependence on costly yet unreliable hybrid and Bt cotton sold by Monsanto and its Indian partners. The Agreement on Agriculture (AoA) has destroyed agricultural livelihoods of millions of peasants and food security of the world's poor. The Deputy Chairman of the Planning Commission wants to see an “exit policy for farmers of India, which in effect means planning for the destruction of their livelihoods.  

The willingness of the US to allow the Doha Round negotiations to grind to a halt by showing inflexibility in offering to reduce distorting farm subsidies in exchange for increased market access is not because agricultural market access is no longer of interest to the US. The US does not have to give up anything multilaterally because it is getting market access bilaterally, often with “non-agreements” like the US – India Knowledge Initiative in Agriculture, which is promoting GMOs, agricultural imports and the entry of US grant Walmart in Indian retail. Monsanto, Walmart and ADM are on the board of the US India Agriculture Initiative.  

US Aid is interfering directly in India's GM policies and has financed the push to commercialise Bt Brinjal, which would be the first GM food crop approved for large scale commercial trials and seed production in India. While India's biosafety assessment framework has no reference to the unscientific “substantial equivalence” principle, (a principle promoted in the US to avoid looking for the unique biological impacts of GM foods), the “substantial equivalence” is the basis of Bt Brinjal data submitted by Monsanto-Mahyco to the Genetic Engineering Approval Committee (GEAC), the statutory body for granting approvals for GMOs. The virus of biosafety deregulation is thus being subtly introduced into India. GMOs are spreading bilaterally without the WTO, which had to be used against Europe in the US – EU GMO dispute.  

The US biotech agenda is also being internalized into India's agricultural policy. The Planning Commission, India's highest planning body, headed by Montek Singh Ahluwalia is appointing a non-resident, the US based Dr. Deshpal Verma, Professor of Genetics and Biotechnology at Ohio, to head a cell to promote GMOs in agriculture and increase the role of global corporations like Monsanto in the farm sector. Bilateral deals are thus mutilating into unilateral policies referred to an “autonomous liberalisation.”  

US Agribusinesses like Cargill and ADM do not need WTO's market access rules anymore to capture India's markets. As part of the Bush-Singh agreement, India has been influenced to import wheat, even though there was enough wheat produced in India. And domestic markets too have been captured by MNC's like Cargill, Canagra, Lever, and ITC. India's food security is being systematically dismantled. Food prices have increased dramatically, and with it, hunger and malnutrition. While being presented as an economic power and the new poster child of globalisation, India now is the home of one third of the world's malnourished children. And the problem of hunger will grow as peasants as pushed off the land and food prices increase.  

Meantime, corporations like Walmart are trying to grab India's retail market, which consists of the small-scale informal sector employing more than 200 million people. Walmart is trying to get in to capturing this large market and has succeeded in getting FDI pushed through in retail. It is also trying to partner with Reliance Industry Ltd (RIL), which is planning to build new super stores in 784 Indian towns, 1600 farm supply hubs, and move the produce with a 40-plane air cargo fleet. The Reliance group has also become the largest land grabber in India, using governments to forcefully acquire hundreds of thousands of acres of fertile farmland at 1/1000^th the market price. These are the subsidies Walmart is seeking through partnerships. And Walmart does not need a GATS to take over retail services in India. Bilateral and unilateral policies are opening up India's markets for Walmart.  

WTO might be on life support, but “free trade” is alive and kicking.  

Bilateral and unilateral, initiatives are the new avatars of globalisation and free trade. And it is these avatars we must challenge to stop corporate rule, while WTO hangs between intensive care and the crematorium.