Asia-Pacific Trade Deal: Trading Away Indian Agriculture?

Colin Todhunter

On the back of Brexit, there are fears in the UK that a trade deal will be struck with Washington which will effectively lower food and environmental standards to those of the US. At the same time, it seems that the Transatlantic Trade and Investment Partnership is being resurrected and could have a similar impact in the EU. These types of secretive, corporate-driven trade deals ride roughshod over democratic procedures and the public interest.

India has not been immune to such deals. The US-India Knowledge Initiative on Agriculture (2005) is aimed at widening access to India’s agricultural and retail sectors for US companies. This agreement was drawn up with the full and direct participation of representatives from various companies, such as Monsanto, Cargill and Walmart, in return for India receiving assistance to develop its nuclear sector.

And now, in India, there are serious concerns about another deal. The Regional Comprehensive Economic Partnership (RCEP) is currently being negotiated by 16 countries across Asia-Pacific and would cover half the world’s population, including 420 million small family farms that produce 80% of the region’s food. Although stumbling blocks have prevented any deal being struck thus far, there is an increased sense of urgency to get it signed.

The RCEP could further accelerate the corporatisation of Indian agriculture. The plight of farmers in India has been well documented. A combination of debt, economic liberalisation, subsidised imports, rising input costs, deliberate underinvestment and a shift to cash crops has caused massive financial distress. Over 300,000 (perhaps over 400,000) have taken their lives over the last 20 years. From the effects of the Green Revolution (degraded soils, falling water tables, drought, etc.) to the lack of minimum support prices and income guarantees, it is becoming increasingly non-viable for many smallholder farmers to continue.

Indian smallholder/peasant farmers are under attack on all fronts. Transnational corporations are seeking to capitalise the food and agriculture sector by supplanting the current system with one suited towards their needs, ably assisted by the World Bank and its various strategies and directives. There is a push to further commercialise the countryside, which will involve shifting hundreds of millions to cities.

GRAIN is an international non-profit organisation and in 2017 released a short report that outlined how RCEP is expected to create powerful new rights and lucrative business opportunities for food and agriculture corporations under the guise of boosting trade and investment.

Land acquisition and seed saving

The RCEP is expected to create powerful rights and lucrative business opportunities for food and agriculture corporations under the guise of boosting trade and investment. It could allow foreign corporations to buy up land, thereby driving up land prices, fuelling speculation and pushing small farmers out. This could intensify the ‘great land grab’ that has already been taking place in India.

GRAIN notes that giant agribusiness concerns want to put a stop to farmer seed saving and sharing by forcing farmers to buy their proprietary seeds each season. The global seed industry is highly concentrated today and recent mergers only further consolidate its power and influence over both governments and farmers. For example, with China having acquired Syngenta, that country has a new vested interest in seeing seed laws strengthened via tighter intellectual property rights under RCEP.

We have already seen the devastating effects on Indian farmers due to Monsanto’s illegal ‘royalties’ (on ‘trait values’) on GM cotton seeds in India. Monsanto effectively wrote and broke laws to enter India. Under RCEP, things could get much worse. If patents are allowed on inventions ‘derived from plants’ (whether hybrid or genetically modified seeds), we could see higher seed prices, a further loss of biodiversity, even greater corporate control and a possible lowering of standards (or a complete bypassing of them as with GM mustard) for high-risk products such as GMOs.

India’s dairy sector

Access to the huge Indian market is an important focus for New Zealand in the RCEP negotiations, especially where the diary sector is concerned. However, according to RS Sodhi, managing director of the country’s largest milk cooperative, Gujarat Co-operative Milk Marketing Federation, this could rob the vibrant domestic dairy industry and the millions of farmers that are connected to it from access to a growing market in India.

The Indian government has encouraged the co-operative model in the dairy sector with active policy protection. However, the dairy trade could be opened up to unfair competition from subsidised imports under RCEP. India’s dairy sector is mostly self-sufficient and employs about 100 million people, the majority of whom are women. The sector is a lifeline for small and marginal farmers, landless poor and a significant source of income for millions of families. They are the backbone of India’s dairy sector.

New Zealand’s dairy giant Fonterra (the world’s biggest dairy exporter) is looking to RCEP as a way into India’s massive dairy market. The company has openly stated that RCEP would give it important leverage to open up India’s protected market. As a result, many people fear that Indian dairy farmers will either have to work for Fonterra or go out of business.

At the same time, some RCEP members not only heavily subsidise their farmers, but they also have food safety standards that are incompatible with the small-scale food production and processing systems that dominate in other RCEP countries. There is sufficient room for concern here: during the ‘mustard crisis’ in 1998, ‘pseudo-safety’ laws were used to facilitate the entry of foreign soy oil: many village-level processors were thereby forced out of business.

The RCEP could accelerate the growth of mega food-park investments that target exports to high-value markets, as is already happening in India. These projects involve high-tech farm-to-fork supply chains that exclude and may even displace small producers and household food processing businesses, which are the mainstay of rural and peri-urban communities across Asia. This would dovetail with existing trends that are facilitating the growth of corporate-controlled supply chains, whereby farmers can easily become enslaved or small farmers simply get by-passed by powerful corporations demanding industrial-scale production.

From pesticides to big retail

Fertiliser and pesticide sales are expected to rise sharply in Asia-Pacific in the next few years. Agrochemical use is heaviest in China and growing rapidly in India. GRAIN notes that China’s acquisition of Syngenta, the world’s top agrochemical company with more than 20% of the global pesticide market, puts the country in a particularly sensitive position within RCEP.

GRAIN states that liberalized trade in farm chemicals are bound to be part of the RCEP, resulting in increased residues in food and water, more greenhouse gas emissions, rising rates of illness and further depletion of soil fertility.

The RCEP also demands the liberalisation of the retail sector and is attempting to facilitate the entry of foreign agroprocessing and retail gaints, which could threaten the livelihoods of small retailers and street vendors. The entry of retail giants would be bad for farmers because they may eventually monopolise the whole food chain from procurement to distribution. In effect, farmers will be at the mercy of such large companies as they will have the power to set prices and also will not be interested to buy small quantities from small producers. In effect, the RCEP will usher in a wave of corporate agri-food consolidation.

It is interesting to note that Ashwani Mahajan, economics professor and national co-convener of Swadeshi Jagaran Manch, an Indian political and cultural organization that promotes self-reliance argues that the ‘make in India’ push by the current government is completely at odds with the RCEP. He argues that no sector seems to want the trade deal and that India’s participation in the talks have overshot the original aim. That aim was to be that of observer, so India could learn from the process. However, Mahajan suggests civil servants now seem to be fully engaged and are ready to sign up to the deal.

The RCEP is a recipe for undermining biodiverse food production, food sovereignty and food security for the mass of the population. It will also massive job losses in a country like India, which has no capacity for absorbing such losses into its workforce

There is a need to encourage localised food economies that are shielded from the effects of rigged trade and international markets. Rather than have transnational agri-food corporations determining global and regional policies and private capital throttling democracy, we require societies run for the benefit of the mass of the population and a system of healthy food and sustainable agriculture that is run for human need.

We need only look at Mexico and what ‘free trade’ has done to that country’s food and agriculture sector: destroyed health, fuelled unemployment, transformed a rural population into a problematic group of migrants who now serve as a reserve army of labour that conveniently depresses the incomes of those in work. The writing is on the wall for India.