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8/20/2014

Food security and Rodriks trilemma - The Hindu

Opinion Comment
Published: August 14, 2014 01:41 IST | Updated: August 14, 2014 07:06 IST

Food security and Rodriks trilemma


Mihir Shah

No compromise: The support that India needs to provide its farmers cannot be given within the limits set by the WTO agreements. File
photo: Shiv Kumar Pushpakar

The Hindu

The government deserves congratulations for its firm stand at the WTO, which finds support in Rodriks trilemma

The Princeton don Dani Rodrik is one of the worlds leading economists. He is a firm believer in and supporter of
globalisation. However, he has also posed a famous globalisation trilemma. A trilemma describes a situation where
only two of three things can hold true at the same time. If any two out of three conditions prevail, the third cannot.
Thus, according to Rodrik, economic globalisation, political democracy, and national determination are mutually
irreconcilable. We can have at most two at one time. Democracy is compatible with national sovereignty only if we
restrict globalisation. If we push for globalisation while retaining the nation state, we must jettison democracy. And if
we want democracy along with globalisation, we must shove the nation state aside and strive for greater international
governance.
As Rodrik argues, if we want to deepen both economic globalisation and political democracy, we would require global
institutions that are truly democratic, which respond to legitimate demands, the very basic needs of world citizens
that is governance at a global level. Since such a global political community is as yet a distant, quite unrealisable
dream, we have to accept the sovereignty of nation states responding to the demands of their citizens. That is if we
respect the democratic ideal.
Prioritising food security
What the government has shown is that it is unwilling to sacrifice the basic requirements for food security of the
Indian people at the altar of what Rodrik terms hyperglobalisation. The needs and rights of the Indian people must
always come first for a democratically elected regime and the Modi government is to be congratulated for affirming
its commitment in this regard, despite the humongous pressure it was placed under, both by lobbies within India and
powers abroad. Sacrificing the national agenda of food security for the sake of an even deeper globalisation is not an
option for a sovereign government of India.
But Rodrik actually demonstrates something even more important. He suggests that re-empowering national
democracies places the world economy on a stronger footing. Developing strong markets and open economies requires
more government, not less. He says, Markets need to be embedded in institutions of collective deliberation and social
choice. Weakening democracy in the quest for deeper globalisation is one of the worst bargains we could strike.
Building on the work of David Cameron (the Yale political scientist, not to be confused with the British Prime
Minister), Rodrik shows that contrary to popular expectation, governments have grown the largest in those economies
that are the most exposed to international markets. And after testing out a number of possible alternative
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8/20/2014

Food security and Rodriks trilemma - The Hindu

explanations for this counter-intuitive result, Rodrik finally concludes that this is because in highly globalised nations,
citizens demand that their governments compensate them against the risk that international economic forces expose
them to.
I would suggest that there is no better way to understand Indias position at the WTO negotiations. Let us first
highlight two outstanding facts about the situation regarding food subsidies and the WTO. One, that the U.S. and the
European Union currently provide four to ten times the agricultural subsidy per person compared to that provided by
India. And two, that India faces a real crisis of hunger and malnutrition among a very large number of its people. In
such a situation, it is only natural that a sovereign democratically elected government will seek to protect the interests
of its citizens, rather than be subject to palpably unfair trade agreements.
Unfair agreements
Let me explain why I call the agreements unfair. There are two decisions that have proved contentious here: the
Ministerial Decision for an agreement on trade facilitation (TFA) and the Ministerial Decision on public stockholding
for food security purposes. India has refused to sign the TFA in the absence of a permanent solution on subsidies on
account of public stockholding for food security purposes. This is at the heart of Indias entire architecture of food
security built up over the last four decades, which includes the system of procurement from and assurance of
minimum support prices (MSP) to its farmers and the public distribution system (PDS), culminating in the recently
passed Food Security Act.
The present WTO ceiling on domestic support is pegged at a mere 10 per cent of the value of production, which is
itself calculated at fixed reference prices of the 1986-88 period. This is ridiculously low, and unrealistic and unfair,
not just to India but to many other nations with a large farm sector. It may be useful here to remember that despite
all the efforts to move people to urban areas and away from agriculture, the latest United Nations population
estimates show that even in the year 2050, around 800 million Indians will continue to live in rural areas. No
democratically elected and accountable government of India can afford to ignore the interests of these people,
especially given the vulnerability of farming, deeply aggravated by the newly emerging context of climate change.
More than 80 per cent of Indias cultivators are small and marginal farmers, who grow crops on less than 5 acres of
land. They face increasing challenges of water and livelihood security and need continued government support to
enable them to earn a sustainable income. This support that we need to provide our farmers cannot be given within
the limits set by the WTO agreements.
Paragraph 47 of the Doha Ministerial Declaration is abundantly clear on a single undertaking, which means that all
agreements come into force together as a package. Thus, India is absolutely right in insisting that the TFA can be
agreed to if and only if there is an agreement on subsidies on account of public stockholding for food security
purposes. Apart from the massive support the government has received from farmers organisations and civil society
groups within India, it has also secured the support of countries such as South Africa, Bolivia, Cuba, Venezuela and
the tacit support of the G-33, except Pakistan.
What is much more surprising is the kind of media furore that the Indian governments position has evoked. This can
only be seen as a reflection of the way in which the discourse on free market fundamentalism has acquired a
dominant position over the last 20 years. A deeper reflection on Rodriks trilemma would hopefully disabuse many
people, who assume that any and all steps towards the free market are an unmixed blessing in themselves, forgetting
that robust structures of governance are essential to the functioning and legitimacy of the market mechanism in all
capitalist democracies, including the most advanced among them.
It is to be very much hoped that Prime Minister Modi will continue to stand firm on Indias position, even during and
after his forthcoming visit to the U.S.
(Mihir Shah is former member, Planning Commission, Government of India.)
Keywords: food security, World Trade organisation, Trade Facilitation Agreement, Indian food security
Printable version | Aug 20, 2014 11:00:20 AM | http://www.thehindu.com/opinion/op-ed/food- View Comments (14)
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