archives: WTO InfoWTO Talks Collapsed - What is the Next Caution ?
Friends and colleagues,
Today (July 24, 2006) the WTO talks collapsed in midst of dispute. When the talks are to be revived is not known. Good News for the developing world - A NO deal is better than a BAD deal.
But farmers in the developing world are not safe. Many things are happening outside WTO which may endanger the farmers in the Third World. National governments are eager to sign free trade agreements (FTAs), bilateral and regional trade agreements (RTAs) which may result in a WTO Plus regime and may at times endanger the livelihood of farmers.
Apart from this, some national governments are unilaterally opening up for imports at the behest of US. India has recently succumed to US pressure and tactics and has unilaterally opened up for imports of wheat, taking the false pretext of shortage
FARM FRONT Column in The Financial Express reveals how government's production estimates were manipulated at the behest of USDA to show shortage of wheat and justify its imports :-
FARM FRONT Column
Statistics do lie, when masters wish
ASHOK B SHARMA | Posted online: Monday, July 24, 2006 at 0000 hours IST | www.financialexpress.comData and statistics are essential tools for making effective policy decisions. A coherent and viable policy decision can be based on reliable data. The processing of reliable data calls for depolyment of models having minimum range of inbuilt error and also the sincerity of the statisticians.
It is the data which influence the policy. But if data are constructed with the sole purpose to justify a wrong policy decision, the consequences are likely to be disastrous to the economy in the long run. Recent developments in the agriculture ministry's statistics division have raised issues of grave concern. It seems that the division has worked to justify the government's plan to import wheat.
In its initial estimate for wheat production in the current year, the division said that it would be 73.06 million tonne (mt). This estimate was arrived at the conference of state agriculture secretaries. Prior to this the government had planned to import 5 lakh (500,000) tonne wheat as the US Department of Agriculture (USDA) sounded the alarm bell of shortage of wheat.
Later, after the import order for 5 lakh (500,000) tonne wheat was booked from AWB Ltd of Australia in February, the USDA came up with a report of a shortfall of 3.5 mt wheat in the country. Accordingly, a global tender was floated on May 8 for import of additional 3 mt wheat on government account. Contracts could be finalised for only 8 lakh (800,000) tonne wheat, and no exporters quoted to supply wheat from the US.
The agriculture ministry's statistics division came up with a revised estimate scaling down wheat production to 71.54 mt on May 12, a day before Parliament was to reconvene after a short recess in the Budget session. This was evidently down to escape the wrath of the Opposition parties in Parliament who were gearing up to corner the government on the issue of wheat imports.
The government again floated a tender on June 12, 2006 for import of the balance 2.2 mt wheat. In the meantime, the USDA again revised its estimate and said that India needs to import 4.5 mt wheat in total. However, as per contract orders finalised on basis of June tender, some exporters quoted to supply wheat from US.
Recently, on July 16, 2006, the agriculture ministry's statistics division again came up with a revised estimate scaling down wheat production to 69.48 mt. The difference between the statistics division's initial estimate of 73.06 mt and the recent estimate of 69.48 mt is 3.58 mt, the quantity of wheat which the government had earlier planned to import at the behest of USDA and for which the contracts were finalised.
The chain of events show that the government had planned its imports on basis of USDA reports and the ministry's statistics division moved accordingly to justify government's import plans.
The ministry's statistics division has justified governments import plan for 3.5 mt wheat. It has yet to justify import of another 1 mt wheat to fulfill the USDA's figure of total import of 4.5 mt. What would the ministry's statistics division do? Will it further downscale wheat production estimate by another 1 mt ? The government has done the job easy. It has allowed the traders and corporate houses to import this additional quantity against a reduced duty of 5% and against relaxed quarantine.
It is interesting to note in context that the statisticians took more than an year to scale down previous year's wheat production estimate from 72 mt to 68.64 mt, just to show that there was a shortage of wheat. The entire year passed and there was no complain of wheat shortage.
The farmer organisations, particularly Bharat Krishak Samaj has estimated that the wheat production in the current year is more than 73 mt as the area under wheat has increased by 4 lakh hectare, and there was no reported damage to wheat crop. The farmers have estimated that the total consumption demand for wheat in the country is around 60 mt. Hence there is no question of shortage of wheat either in the current year or in the previous year even if the government's reduced production estimate is taken into consideration. The government's statisticians have helped to justify the government's import plans dictated by USDA, rather than being more professional in the job.
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