Shiv Raj Bhatt:

Scarcity of food in the hills and other remote areas of Nepal is frequent news. This problem not only reflects inequality, but also policy failure. The basic needs limited to “food, clothes and shelter” are a distinct dream for many Nepalis, creating a problem that should be solved urgently. Despite more than 75 per cent of the population being engaged in agriculture, the majority lack sufficient, safe and nutritious food. The government policies are responsible for this situation, and it is not the outcome of Nepal’s accession to WTO, nor due to the wave of globalisation. However, the WTO membership may affect the situation in the future. The impact will not be unique and predetermined — it all depends on our policies and efforts.

WTO’s role in determining our food security is far from clear. Various WTO agreements, especially the Agreements on Agriculture (AoA), Technical Barriers to Trade, Trade Related aspects of Intellectual Property Rights and Trade in Services have significant importance in determining food security in a country. Those who support the membership claim that its membership allows us to design development strategies and trade policies in a more predictable, stable and transparent trading environment, offers more trading opportunities and eliminate disadvantages of non-membership, and therefore helps Nepal attract foreign direct investment and expand employment opportunities.

But opponents of the rule-based trading regime claim that it will further worsen the distribution of income and lead to an increase in the cost of inputs and a reduction in the access to input for farmers, thus increasing food insecurity. They say membership might intensify food insecurity through reduction in subsidy and public distribution system. However, WTO agreement (AoA: Article 6, Para 2) clearly states that agricultural and rural development investment subsidies, which are available to agriculture in

developing countries, and agricultural input subsidies generally available to low-income or resource-poor producers in developing countries, shall be exempted from domestic support reduction commitments that would otherwise be applicable. Therefore, Nepal has enough room to support its agricultural sector and rural development programmes even after acceding to the WTO.

In this regard, agreements with other agencies like the Asian Development Bank (ADB) should be signed more cautiously. Recently the ADB cited failure stories of subsidy reintroduction in various countries, and reiterated its stand that subsidy could not be distributed fairly in the

context of the weak governance in Nepal. But, if this is true, we have to improve our governance system instead of ignoring the people. Food security will be intensified through the increase in the prices of agricultural inputs, which resulted from monopolisation of seeds and other inputs. But one should not ignore the economic rationale behind protection of intellectual property.

In the long run, developing countries also benefit from efficiency gain, technology transfer and increased productivity. WTO membership may affect our food security through its impact on poverty and inequality that in turn is affected by growth, employment, wages, revenue and

pro-poor expenditure effects of the trade liberalisation. If managed well, membership may help us to solve the problem, but it may worsen the situation the other way round. So, to make WTO an instrument of poverty reduction and to fulfil basic needs, we need to design and implement appropriate policies.