Tuesday, July 25, 2006

Other hearts in other lands*...

While I have been trying to figure out how much damage the Doha Demise will cause, others are celebrating. Perhaps for good reason.
What makes Indian agriculture significantly different from the industrial agriculture in America and European Union (and for that matter in other OECD countries) is that Indian agriculture is diverse and based on available biodiversity wealth. India grows 260 crops every year whereas Europe and America cannot count more than 30 crops, of which 10 crops or so are commercially important. In India, each of the 260 crops is linked to millions of livelihoods.

And yet, the international magazine The Economist (July 8, 2006) wrote: "India is more worried about upsetting subsistence farmers than it is excited by the prize of freer trade in the services that now matter so much to its economy". What it fails to tell us is that the gains in services only provides employment to less than 1.5 million people whereas 650 [million]people are directly dependent upon agriculture and another 200 million are indirectly banking upon farming for survival. Moreover, the gains in services would have happened in any case with or without WTO since the service sector required cheaper manpower.
The writer is not completely wrong. Nor should we continue to write off this many people as non-players. As China and India outgrow and "out-educate" the West, our inability to look beyond the next ten minutes may be remembered as a foolish choice.

Let's start with U.S. and European agricultural subsidies, a key target for the Doha negotiators. Are those subsidies too big? Certainly. Is the Doha Round the right forum for lowering them? Probably not. Here's why: The people who suffer the most from those subsidies are the taxpayers of the U.S. and Europe, who pay billions of dollars a year to politically well-connected farmers in their own countries. If voters haven't managed to get rid of those subsidies in their own countries, it's difficult to see how foreign diplomats are going to have any luck. And, in fact, they haven't.

Too many of us were looking for Doha to do the dirty work of deregulating agriculture and restoring adult status to farmers in the EU and US.

Looks like we'll have to do it the harder way.

* Finlandia by Jon Sibelius

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