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Explained: Why protesting farmers want India out of World Trade Organization

The ongoing farmers' agitation in India, primarily led by farmers from Punjab and Haryana, is centered around demands for legal assurances regarding Minimum Support Price (MSP) and withdrawal from the World Trade Organization (WTO). Farmers oppose WTO rules that limit domestic subsidies and hinder their demands for MSP.

Farmers Protest Explained Why farmers want India out of World Trade Organization
First Published Feb 26, 2024, 7:09 PM IST

The ongoing agitation by hundreds of farmers from Punjab and Haryana at various borders of Delhi has brought to light their pressing demands and the challenges they face in achieving them. At the forefront of this movement are demands for legal assurances regarding the Minimum Support Price (MSP) for 23 crops and the withdrawal of India from the World Trade Organization (WTO) and free trade agreements.

Also Read: India's poverty level may have fallen to around 5%: Niti Aayog CEO

What does the World Trade Organization do?

The World Trade Organization (WTO) is a global international organization that was established to regulate trade rules between different countries. India, being among the founding members, actively participates in the organization. Currently, the WTO has 164 member nations, representing 98 per cent of world trade.

Why are farmers opposed to WTO?

The farmers' agitation is rooted in their desire for legal assurances regarding MSP, crop procurement, and public distribution systems. However, India's membership in the WTO since 1995 poses challenges to these demands as WTO rules often contradict the farmers' demands.

What are Free Trade Agreements?

Free trade agreements are treaties between two or more countries aimed at facilitating trade by reducing tariffs, subsidies, and other barriers. These agreements promote open markets and facilitate smoother trade relations between nations.

What are WTO norms on MSP?

WTO regulations mandate member countries to limit domestic subsidies for agricultural products to prevent distortions in global trade. However, India's MSP subsidies exceed the limits prescribed by the WTO, leading to trade disputes with other member nations.

While India provides relatively lower subsidies per farmer compared to countries like the United States, its total subsidies surpass the WTO-prescribed limits. This has led to criticism and opposition from other WTO member countries.

What is the Minimum Support Price (MSP)?

MSP is a government-fixed price that provides a safety net to farmers, ensuring them a minimum income for their crops. However, MSP applies only to crops procured by the government, leaving farmers vulnerable to market fluctuations in open markets.

What are the farmers demanding?

The farmers' agitation encompasses a range of demands, including legal guarantees for MSP, withdrawal of cases against protestors, compensation for victims of incidents such as the Lakhimpur Kheri incident, loan waivers, exemption from pollution laws, and pensions for farmers and labourers.

Image Courtesy: Mudassir Bhatti/Pexels

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