(M.K.Venu is Executive Editor of Amar Ujala publications group)There is some method in the way Prime Minister Narendra Modi has tried to defy the WTO on the issue of India's food security which has got inextricably linked to the global agreement on trade facilitation. The trade facilitation protocol, which US experts say would add $1 trillion to global trade, was billed as the most important agreement stitched up by the WTO since the Doha Development talks commenced in Qatar in 2001. The Doha Development round saw umpteen failures over the past 13 years and the Trade Facilitation Agreement (TFA) was seen as something that would save, and indeed revive, the WTO. In short, there was too much at stake for the United States and European Union which wanted the TFA to be signed by all member countries by 31 July, 2014.
Given this background, it was unusual for the BJP government to defy the WTO and not sign the TFA until India's concerns over food security and public procurement grains from farmers were fully addressed.
The answer to why the BJP chose to stand its ground even at the risk of being isolated among developing countries lies probably in Modi's promise of ushering in a new kind of political economy based on the thought process of Gandhi and Deendayal Upadhyay. While this thought process may not be fully mature or ready to be articulated as yet, one could see the contours of it in the BJP manifesto which seeks to shift the focus of policy towards the farm sector in a big way.
The Indian farmer, mostly belonging to the non upper caste segment, voted for the BJP in a big way in the 2014 general election and Modi thinks he can accommodate their aspirations in a socio-economic framework propounded by Gandhi and Lohia - a self sustaining and environmentally viable rural economy. The Swadeshi Jagran Manch's success in making the government review the possibility of allowing trials of genetically modified seeds is also driven by this new thinking. A senior Cabinet minister unabashedly told this writer that the government was following a "Gandhi-Lohia-Deendayal" socio-economic template. He said it in the context of the government's evolving stance at the WTO.
The only problem here is the Gandhian framework still exists pretty much in the abstract even though Sangh Parivar adherents swear by it. It remains in the abstract because there is no real plan articulated yet on how a self sustaining, rural economy will emerge in the middle of industrial, capital and technology which is spreading everywhere, including in agriculture. Is the process of economic globalisation within WTO or within regional trade arrangements compatible with the Gandhian model? In fact, a Swadeshi Jagran Manch (SJM) office-bearer even challenged the notion that BT cotton has shown high productivity in India. "Government statistics shows that BT cotton has grown by increased acreage under production rather than by higher productivity per acre. Even a Gujarat cannot boast of great productivity gains" , said the SJM ideologue.
Clearly, the SJM does not even believe that the Gujarat model of agriculture is also replicable in the rest of the country. Given this thinking within the Sangh Parivar, it is not surprising that the government has chosen to chart a somewhat different course at the WTO.
This has implications for its economic engagement with the developed and developing world. It is difficult to totally de-link domestic imperatives from that of India's global obligations.
There are reports that the BJP may still come around and agree to save the TFA if the WTO General Council introduces a new formulation that promises the continuance of India's public food procurement program until a permanent solution is found in regard to the existing anomalies in the Agreement on Agriculture. This could happen over the next few months.
The NDA government has been saying India will sign the trade facilitation agreement only if a permanent solution to food procurement is initiated simultaneously. If the WTO agrees to some compromise, Modi can claim a victory of sorts when he hits the campaign trail in the forthcoming assembly elections.
Actually, Modi's explicit promise to Indian farmers that the government would ensure a 50% profit margin to them over and above their total costs could be another reason why India has taken this position at the WTO. Potentially this could be violative of WTO if costs incurred by farmers are very high. One can't promise farmers such high margins if they are inefficient in their production. Consequently, the Sangh Parivar may have intervened to ask Modi not to make any commitment to the WTO at present. If the WTO gives India some leeway, it may be projected as a leg up for the "Gandhi-Deendayal" model. The Sangh Parivar is experimenting with new ideas whose compatibility with global trade and capital will be tested in the future. How these ideas shape future political/electoral behaviour of rural India is another matter altogether.
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