While I was hoping to write about RCEP exclusively, just today farmer protests have happened against three farm laws which had been passed by our Govt. about a month ago without consulting anybody. The bills benefit only big business houses at the cost of farmers. This has been amply shared by an open letter to one of the biggest business house which will benefit the most.
Now while that is a national experience and what it tells, let me share, some experience from the State I come from, Maharashtra. About 4-5 years back Maharashtra delisted fruit and vegetables from the APMC market. But till date, the APMC market is working, why, the reasons are many. However, what it did was it forced the change to sugarcane, a water guzzling crop much more than previously. This has resulted in lowering the water table in Maharashtra and put them more into debt trap and later they had to commit suicide.
Now let us see why the Punjab farmers have been so agitated that they are walking all the way to Delhi. They are right now, somewhere between Haryana-Delhi border. The reason is that because even their experiments with contract farming have not been good. This is why they are struggling to go to Delhi to make their collective voices heard and get the farm bills rolled back. Even the farmers from Gujarat were sued, but because of elections were put back, the intentions though are clear. This has also happened in Uttar Pradesh and for sugarcane and that too by Bajaj Company. At the end of the day, the laws made by the Govt. leaves our farmer at the mercy of big corporations. It is preposterous to believe that the farmer, with their small land holdings will be able to stand up to the Corporation. Add to that, they cannot go to Court. It is the SDM (Sub-Divisonal Magistrate) who will decide on the matters and has the last word. If this is allowed, in a couple of years there will be only few farmers or corporations who would have large hand-holdings, and they would be easily co-opted by the Government in power.
Just in – A gentleman who turned off water cannon being shot at farmers has been charged for murder 😦
Currently, the Government procures rice in vast quantities and the farmers are assured at least some basic income, in the states of Punjab and Haryana –
Recently there was also an article in Indian Express which shares the farmer’s apprehensions and does share that it’s a complex problem with no easy solutions. The solution can only be dialogue between the two parties. This was also shared by Vivek Kaul, who is far more knowledgable than me on the subject and made a long read on the subject.
The Canada Way
Recently, while sparring on the Internet, came to know of the Canada way. Here, the Government makes the farmer a corporation and the Government helps them. But the Canada way seems to largely work as the Canadian Government owns the majority of the lands in question. And yes, Indians have benefited from it but that is also due to a. the currency differential between Canadian dollar and Indian Rupee and the 99-year land lease. There may be other advantages that the Canadian Government bestows and that is the reason possibly that most Punjabi farmers go to Canada and UK to farm.
While looking at it, I also came across the situation in the United States and it seems the situation there seems to be becoming even more grim.
RCEP stands for Regional Comprehensive Economic Partnership. We were supposed to be part of this partnership. Now why didn’t we join, for two reasons, our judicial infrastructure is the worst. It took 8 years to decide on a tax retrospective case (Vodafone) and that too finally outside India. And that decision, by no means an end. The other thing is all those who have joined RCEP have lesser duties, tariffs then India. What this means is that they are much more competitive than India. While there is fear that perhaps that China may take over its assets as it has done with few countries around the world, the opportunity for those countries was too good to pass up even with the dangers. But, then even India has taken loans from the Asian Infrastructure Investment (AIIB) Bank where China is the biggest shareholder. So it doesn’t make sense to be insecure on that front. And again, it is up to India or any other sovereign country to decide to take loans from some country, some multilateral organization or any other way and on what terms.
What China has done and doing is similar to what IMF (being used primarily by the United States) had done in its past. The only difference is that time it was the United States, now it is China. America co-opted Governments, and got assets, China doing the same, no difference in tactics, more or less the same.
There has also been a somewhat interesting paper which discusses how the RCEP may unfold in different circumstances. In short, it tells that the partners will benefit, some more than others. It also does compare the RCEP to CPTPP (The Comprehensive and Progressive Agreement for Trans-Pacific Partnership). While the study is a bit academic in nature as the United States has walked out and the new president-elect Joe Biden hasn’t made any moves and is unlikely to make any moves as there is deep divide and resentment about multilateral trade partnerships domestically within the United States. This news and understanding was quite shocking to me as it shows that unlike the United States of the past, which was supposed to be a beacon of capitalism and seemed to enjoy capitalism, it seems to be an opportunist only. There is also this truth that under Biden, there is only so many things on which he would need and can spend his political capital on.
As can be seen, economy at least for the democrats, this time around is pretty far round the corner. He has a host of battles and would have to choose which to fight and which to ignore.
In the end, we are left to our own devices. At the moment, India does not know when it’s economy will recover –
There has been another worrying bit of news, now all newspapers will need to get some sort of permission, certification from Govt. of India about any news of the world. This is harking back on the 1970’s, 1980’s era