Defying WTO may win Modi assembly polls but can he sustain his stand?

Most foreign diplomats and economic experts thought it was self-defeating for the BJP government to defy the WTO by not signing the Trade Facilitation Agreement until India's concerns over food security for its billion people was addressed. Prime Minister Modi's final statement after the New Delhi visit by the US Secretary of State, John Kerry, was quite revealing.

Modi said the Trade Facilitation Agreement(TFA) was good for India but the food security question had to be resolved simultaneously. Modi's stand needs to be understood from the standpoint of domestic politics. Narendra Modi wants to bring the small farmer—with less than 5 acres of land—at the very centre of economic policy making. Nearly 80 percent of India's farmers have less than 5 acre land and their well being is a pre-condition for producing enough to meet India's food security needs. The small farmer's welfare is therefore linked to food security for millions.

 Defying WTO may win Modi assembly polls but can he sustain his stand?

Prime Minister Narendra Modi. PTI

The answer to why BJP chose to stand its ground in WTO even at the risk of being isolated among the developing countries lies probably in Modi's promise of ushering in a new kind of political economy based on the thinking of "Gandhi, Lohia and Deendayal Upadhyay". While these thought processes may not yet have translated in the form of government's programmes, 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 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. Deendayal Upadhyay also believed that the small farmer's basic economics must drive all other macro policies. 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 exists pretty much in the abstract. 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 compatible with the Gandhian model? These are fundamental questions which we have collectively avoided so far. The Gandhian model also advocates a radically different mode of consumption based on austere habits and preservation of environmental public goods. Will the aspirational youth, fed on consumerism, accept the Gandhian mode of consumption? This debate is very critical as it is generally recognised that over a billion Indians cannot afford to consume like the Western societies have over the past century. Such consumption is based on aggressive, over-exploitation of resources and cannot be sustained for long. Is India's evolving stance in WTO implicitly reflecting these concerns? We need a debate on this.

Meanwhile, there are reports that the BJP may still come around and agree to save the TFA if the WTO 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 BJP has already begun the exercise if explaining to its cadres why it did not sign the WTO agreement. It is possible the party will reach out to the farmers in the next few months and tell them it defied WTO in order to get them a fair deal. This may work politically in BJP's favour during the assembly elections. But in the longer run the government will have to deliver on its promise to the farmers who need to be properly incentivised to provide food stocks for a billion people at reasonable prices. The Modi government's performance in agriculture will be judged this after a few years. Defying WTO is worthwhile only if Modi can deliver on his promise to the farmers.

Updated Date: Aug 09, 2014 18:44:08 IST