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India’s food security
Since the time India acquired her independence back in 1947, there have been multiple agricultural policies that have been passed. They have been passed with an aim of reducing the food insecurity, hunger, malnourishment and poverty that was rising at an alarming rate. Iran economy has been predominantly dealt with the oil business that financed their economy; therefore, financial resources are not equal for sustainable development of the country. Additionally, the countries environment is characterized by arid and semi-arid regions that are the primary causes of drought spells in the area. Farmers are uneducated and have resulted in the abuse of the natural resources available to their disposal. The resources include land and water resources that are readily available for use in agricultural practices. Similarly, the subsistence farming that is widely practiced in the country leads to high risks in agriculture leading to food insecurity; inefficient government strategies can also be blamed partly for the accelerated cases of food insecurity. The programs and policies were focused on marketing and trade sectors of the economy. Food is a requirement for the survival of human being, every country that harbors the interests of people at heart should work hard to ensure that there is food security in the country. Currently, there is a new trend that has led to the commercialization of the agricultural sector which is a threat to the efforts to food security in the world. World Trade Organization (WTO) which is mandated by ensuring safe trade in the world has come up with strategies to ensure that the commercialization of food industry is in control.
The strategies that the organization adapts to the member countries include allowing subsidies and trade restrictions. The government provides grants for a purpose of funding the sector to ensure that they achieve in their efforts to maintain the food security. The subsidies are also provided by the international community to the member states; the organizations include International Monetary Funds and the World Bank. There are trade restrictions that have been set by the WTO, which limits the extent to which a country can engage in trading activities in local and international markets. The limitations are affected by a purpose of regulating the goods that a country can export to other countries and the terms of trade. Similarly, there has been a concern with the rate in which food insecurity is rising in the world; nations have come together with an effort to reduce the impacts of the crisis. Economically, food insecurity has been affecting the development of many countries in that development cannot be achieved when there is no food security. Food insecurity can be attributed to the policies that have been passed in many countries with an aim of curbing the problem. Some of the policies have ended negatively impacting other sectors of the economy; therefore, all the policies should be all inclusive before their implementation process is initiated.
Analysis of Issue I
India is known as a country that has a third of the poorest population in the world. The Modern Indian country has been putting all the necessary efforts to boost the standards of living of the Indians. Poverty has been characterized by food insecurity in India and most specifically in the rural areas. As a result, the Indian government has come up with policies aimed at reducing the food shortages effects in the country. The government has put numerous programs aimed at alleviating poverty in the country. As a result, the country's economy has risen momentarily, and the standards of living are increasingly improving. Further to that, the government of India recognized that the highest level of poverty was coming from the rural regions of Orissa and Bihar. As a result, the Government engaged in instituting policies with hopes of lifting the economic standards of the people. The programs included coming up with farm subsidies that would be facilitated by the government and introduced to the citizens through the different government agencies found in the country. However, it is important to note that the farm subsidies were in opposition to the WTO efforts to maintain a vital international trade deal operationally.
The large scale program targeted the population of approximately 1.2 billion people who comprises up to 70% of the total population and provides them with extremely cheap grains. The people targeted by this program have been found to survive on less than two dollars in a day. The program is already in the legislation process and if authorized it will be a violation of the WTO rules which limits the value of subsidies that can be offered to 10% of the cost of a crop. This means that the subsidies the Indian Government seeks to provide is 60% above the authorized rate by the World Trade Organization. Consequently, the Indian government has been seeking the support of other members who subscribes to a similar situation of food insecurity to rally for the changes of the WTO rules. The efforts by the Indian government have been targeting the less affluent countries, and the efforts are aimed at ensuring there are food security and reduced rates of poverty in the country. WTO has been improving the international trading systems for almost 12 years now. However, the rules regarding the farm subsidies have made the organization considerably lose its credibility amongst its members.
There are several reasons that the Indian government that they have put into consideration to trigger the decision to implement the farm subsidy policy. In countries that are already developed appropriately for WTO to control the subsidies offered by the governments on the farm produce. There is no an absolute reason that can allow the organization to deny the developing countries the right for subsidizing their farm products. India being a developed country, it was not fare for the agency to deny them that right. Consequently, the country has been seeking for fairness in the WTO to all their members as well as equitable human rights observation across the world. Secondly, the food subsidiaries were a big gain towards an establishment of a food secure country. As explained earlier in this paper, India has all along been witnessing problems of food insecurity, at the same time; it is the second largest country in the world in terms of population. In case the controversial policy passes and implemented it will increase the farmer's willingness to provide food. Consequently, people would have an extensive range of choices for the food they want to consume.
The concern with the WTO is that the government of India will take an advantage of the passage of the policy to be exporting the food at extremely cheaper prices thus distorting the market. As a result, WTO has established laws that limit food subsidies in an effort to ensuring a fair trade for all the countries that trade together in the world. Pundits against the passage of the policy claim that, its passage will mean that the country will have a more competitive food prices as compared countries such as China and Thailand. This will be a big blow to the multilateral trade. In addition, the policy has not been implemented, and there have been persistent concerns on whether India should implement the policy. However, the decision lies with the WTO, and thus it shall depend on the relationship between the country with WTO and value generated by increased food security in the country.
Analysis of issue 2
The Indian government had imposed trade restrictions on the American government and other European Union countries with an aim of ensuring a stabilized food prices in the country. Trade restrictions that were adopted by the government were in the form of tariffs and import licenses. In addition, despite subsidies being a way of helping the citizens to improve the food production practices it also doubled as a form of trade restriction. The core aim of all these efforts by the government of India is to improve on food security and consequently reduce the poverty rates in the country. However, considering the theory of comparative advantage which founded the World Trade Organization trade barriers are not the best option for solving an economic crisis. It results in economic inefficiency and trade wars when the countries are repeatedly involved in trade restrictions with each other. The policies passed by the WTO focuses on the improvement of the international trade, removing all barriers while sparing those of national interest such as those that touches on the security and health situations. India had imposed trade restrictions with an aim of promoting local market and producers while alienating the international market players into their local markets. Importantly, the trade restrictions instituted by the Indian Government were being criticized by the virtue that it is a developing country. The already developed countries in which the trade restrictions had been targeted to are the determiners of the market dynamics and they are mandated in setting trade policies. There are the food products that the Indians were best at producing, the products were faced with trade barriers equally. However, trade restrictions in the case of an already developed country; it results in overproduction and as a result dumping to the World markets. As a result, the poorest citizens of such a country are most affected more especially the poor country farmers. India being a developing country, trade restrictions would not have affected the poor farmers, but they could have promoted their products by removing the competition from international market players in the form of imports. Despite the fact that trade barriers reduce the choices available to choose from leading to settling for an inferior commodity or exploitation by the sellers in terms of prices. WTO had devised a protocol dubbed Trade Facilitation Agreement, which was formed to be implemented the countries that were involved in everyday trading activities. The purpose of the agreement was to lower the trading difficulties that already existed through a process of establishment of reforms.
Figure 1: Iran food production statistics
Source: Food Corporation India (2014)
The rationalizations were to be carried out on the customs duties and tariffs with an aim of removing all the imposed trade restrictions. However, the Indian Government had been all through hesitant in agreeing with the protocol and had declined to sign. The rules that govern food products international trade are set in place by the rich countries in the European Union, however, the rules pertaining the agricultural business has changed considerably. As a result, the developed countries have dominated in the markets of the poor countries guided by motives to make profits and increase their market share but not to improve the food security in those countries. The efforts of the countries should, however, be thrilled by the need to secure hunger amongst the citizens, and to improve the livelihoods of the farmers. The majority of the farmers in India depended on their farm produces as the main source of their livelihood. However, the venturing of the international market players has dwindled their hopes, and they have struggled to make their ends meet with the little they get out of the competition. In addition, they purely rely on the government help and protection in the form of subsidies and imposition of tariffs. Also included is a heavy tax to the already developed countries who may be seeking to dump their products in the foreign market. Therefore, the government of India had strategically thought and put the economic theories at play. For any country to develop and survive the pressures of underdevelopment, such a country need to empower their citizens, protect them from unwarranted foreign competitions.
Analyzing the case with the policies adopted by other countries, it is possible to gain more insights into this problem of food shortages in India. It will act as a proof that the subsidies and trade restrictions adopted by the Indian government if given a green light by the WTO they will create a milestone towards an establishment of food security in India. United States of America had been engaging in setting up of indirect subsidies to the benefit of their citizens and enhancing food security. Throughout the years, the American government has been increasing the amount of money budgeted to the farmers citing that the cash is meant for farm income stabilization. The amount estimated approximates to 25 billion dollars per year; the release of the money is mandated in the farm bill passed in the year 2007. The cash offered to farmers are meant to pay them for any losses made by any adversaries that include climatic changes or any calamities. Consequently, this is subsidies that are offered by the American government tagged differently not to elicit complaints from other members of the WTO. Therefore, denial of rights to the Indian Government from providing subsidies to the poor farmers in the country would be double standard action by the WTO. In addition, the American government has been providing the subsidies to different regions of farming. As a result, the government has failed in ensuring that there is a favorable competition with the similar farm producers from the developing countries with no subsidies to produce their farm produces. It is evident that this is a way of establishing trade restrictions to the developing countries in a hidden manner that promotes the aspect of self-centric attitude that the Americans have. The same case has been replicated in the European Union; the member states have been offering subsidies to their citizens to a tune of 70 billion dollars. Coincidentally, India's efforts to bring sanity to their agricultural sector to improve their food security have been met with a lot of opposition. The opposition has been emanating from different quarters yet the countries subsidies have not equated to 10% of what the European Union offers. This is an act of double standards and discrimination in terms of Gross Domestic Product and per-capital income. The same policy applied by WTO against India should similarly be vested in the EU member states, or the policies withheld altogether and are restricted from being implemented.
The member states of WTO have been worsening the situation of the country having a future with food security by denying the country the right to have an institutional mechanism as an alternative proposal. This was during the ministerial; talks held in Bali in the year 2013. After declining to grant India their wishes of establishing an institutional mechanism, the G33 ended establishing a Trade facilitation agreement. The Trade Facilitation Agreement would open up the Indian market to global investors of the agricultural products with an estimated value of 300 billion dollars. This would be a setback to the government efforts in ensuring the availability of a stabilized food security in the country. Similarly, efforts to minimize the rates of poverty would be thwarted since the competition from the foreign investors would diminish the government efforts to protect the poor farmers from exploitation. India has all along been negatively gaining in their efforts to establishing a food secure nation; they have been affected by the administered price mechanism by the WTO. Vigorous exploration has continuously been carried out on their subsidies with an effort to thwart any efforts of the government to go against the policies set by WTO.
Figure 2: American subsidies to agricultural practices
Source: Congregational Budget Office (2005)
World Trade Organization has established a strategy that ensures that all member states compile to the data requirements for the subsidies. In these policies, different centers and countries have to continuously supplement all the information across all stages of their subsidies. The information required to be provided the programs schedule, the crops covered by the subsidies, support prices and the individuals who have been targeted by the strategies. India, being a member of WTO has to abhor with this set policies. As a result, it will expose themselves to its future strategies without any safeguard of their efforts.
Conclusion and recommendations
Subsidies and trade restrictions are the best solution to sustainable food security in Iran. As a result; WTO should remove all the restrictions preventing the member states from engaging in such practices. Offering of subsidies to the farmers is an excellent method of motivating them, consequently, more farm produces will be produced and the countries food security will be boosted. Similarly, trade restrictions will be a way of promoting the farmers in India, and unnecessary competition will be evaded. Importantly, trade restrictions restricting foreign venture into the agricultural sector will be a milestone in the Government efforts. Nevertheless, a lot has to be done since the two approaches are not enough to acquire total food security. There remains that have to be carried out in terms of legislating policies that will help to effect the two approaches explained above. WTO is supposed to harmonize the challenges and benefits accrued by the developed and developing countries. There should be no any discrimination in terms of the countries development or the standards of living. Any decision taken should be all inclusive and should not limit the countries from attaining their respective economic and social developments. Similarly, it is also important to recommend the other members of G33 to join hands with Iran in its quest to ensuring a change in the WTO policies on subsidies and trade restrictions. More specifically, the countries that are not fully developed economically since the change in the plans will also be of benefit to their respective economies. Lastly, the road to sustainable real security is involving and hectic; it requires collaboration from all sectors of the economy. All the stakeholders ought to join hands and ensure that maximum food security is achieved.
Currently, Iran is being faced by rapid food insecurity and persistent environmental degradation associated adverse impacts. Similarly, more than 50% of the total population is suffering from malnutrition. Therefore, it is a fact that food and incomes are unequally distributed in the country since most of the affected people are those residing from the rural areas. Government of Iran has tried to devise several policies under the umbrella of National Vision Plan with a primary objective of improving the living standards of the population by reducing the rates of poverty. In addition, the policies are aimed at enhancing the establishment of a sustainable food security in the country. However, the formulation of the strategies does not imply that they will successfully be implemented; formulation of policies and their implementation are independent of each other. Different research works which have previously been carried out reveals that the policies set by the Government has not been fully implemented. Those which have been implemented fully have not elicited full results as expected by the policymakers. The reason for the lack of complete success of the policies in reducing food insecurity and poverty reduction can be attributed to several factors. Firstly, food insecurity in Iran is an international problem; the global market dynamics have taken part in ensuring that food insecurity is a reality in Iran. Secondly, is the regulation of the world trade by an international organization, in the organization, there are the decision makers and they are policed they institutes are self-eccentric. Therefore, Iran has little or no say in the factors that are in play in the international markets.
The policies by the WTO restricting the providence of subsidies by the government to the farmers of Iran are a limiting factor for an established food security in the country. Similarly, it leads to the increased levels of poverty more specifically among the people residing in the rural areas. Therefore, if the Iran quest to be offering food produce subsidies and trade restrictions should be granted with no further delays. It is projected that three years to come, Iran shall have obtained full food security if the policies set by WTO are restrained and applied equally and not selectively. The purpose of this paper was to provide with a recommendation; they have been provided, and if they are followed, food insecurity will be a thing of the past in Iran.
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