Ghost of PL-480 returns as India avoids wheat trap again

India and the United States continue to share a special relationship. Both are driven by insecurity. These insecurities must be attributed to Uncle Sam’s dogmatic belief that the developing world will toe his line, come what may.

In fact, the fundamentals of the relationship are somewhat similar to the 1960s even today. At that time, the United States had attempted “wheat diplomacy” with India through its PL-480 program. The relationship soured once the United States attempted to impose harsh conditions on its wheat supplies. Six decades later, India is more than self-sufficient in wheat production. The tables turned today. Now the United States wants India to export its wheat to other parts of the world amid rising prices due to the war in Ukraine, as India avoids falling back into the wheat trap.

The ghosts of PL-480

Indo-American friction over wheat dates back to the Nehruvian era. In 1954, US President Dwight D. Eisenhower launched the Public Law 480 (PL-480) or “Food for Peace” program. This was an initiative to unload all of the surplus wheat that the United States had grown with price support. The United States has also started using it as a tool of diplomacy, because when another nation depends on you for food, you can easily coerce them into submission.

Also from India, the PL-480 was a practical option. India’s first prime minister, Jawaharlal Nehru, pursued a model of central planning that relied heavily on state-backed investment in heavy industries. PL-480 enabled the supply of food to maintain political stability and channel state resources to industrial spending.

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India, however, realized in the mid-1960s that American food supplies came with strings attached and were used as a means of diplomatic interference. At one point, the United States even came close to refusing wheat shipments to India, which threatened to push the country to the brink of starvation. Ultimately, India would achieve agricultural self-sufficiency through the Green Revolution and shed dependence on American wheat.

The wheat confrontation begins again

Six decades after the PL-480 controversy erupted between the two countries, India and the United States once again find themselves at a crossroads over the commodity.

This time, India has imposed restrictions on its wheat exports. Wheat can only be exported out of India with the prior approval of the central government at the request of the government of the importing country.

India curtailed exports amid a persistent heat wave and lack of rain, forcing authorities to cut wheat production estimates. Moreover, India has objected to WTO rules that prohibit a country from exporting grain purchased by the state from farmers at an artificially set price, i.e. the support price. minimum (PMS) in the case of India.

Either way, New Delhi stands ready to help vulnerable and developing countries by allowing government-to-government transactions.

This is why India has also requested a waiver from the WTO to export wheat from state-owned stocks. India’s Ambassador to the WTO, Brajendra Navnit, said: “We need to look at the existing constraints in the Agreement on Agriculture that are hampering increased (food) supplies during this crisis. And we know there is no substitute for increasing global supply right now.

If the WTO restrictions are eased, India will be able to export its wheat stocks and will also help reduce the burden of soaring wheat prices around the world.

However, the United States, Germany and other G-7 countries have criticized India’s position. They argue that restrictions on wheat exports could worsen the current food crisis in the world.

India avoids falling into the wheat trap

Asking India to export wheat on terms set by the Western world for its own benefit is rather a condescending attempt to tell the country that it has some sort of sole responsibility for unleashing soaring world prices. The richer nations therefore want India to do the heavy lifting.

This contrasts sharply with Washington’s own track record. Remember that the United States could have left India in a severe food crisis in the 1960s if New Delhi had not managed to increase agricultural production in time. At this time, the United States was motivated by self-interest and India’s unwillingness to take sides between the USSR and the United States. Today, India does not abdicate its moral responsibility, yet the United States lectures it on wheat exports.

Meanwhile, New Delhi insists on government-to-government transactions and avoids the hoarding of food resources by rich countries. Minister of State for External Affairs, V Muraleedharan, warned: “A number of low-income societies today face the twin challenges of rising costs and difficult access to food grains. Even those like India, which have sufficient stocks, have experienced an unwarranted increase in food prices. It is clear that hoarding and speculation are at work. We cannot let this go unchallenged.

The Minister added that India will play its part in ensuring global food security in an equitable and compassionate manner.

Drawing a parallel with the hoarding of vaccines during the pandemic, Muraleedharan added: “We have already seen to our cost how these principles have been ignored in the case of Covid-19 vaccines. The opening of markets must not become an argument for perpetuating inequalities and promoting discrimination.

For its part, India urges advanced economies to share some of the burden to ease the pain inflicted by the ongoing food crisis. It has been estimated that rich countries waste food worth hundreds of billions of dollars every year and if they curb their extravagance in terms of food waste, the problem of world hunger could be effectively solved.

India is ready to export its wheat, but not in a way that ends up putting more food in the hands of governments that might hoard and waste those resources. This has led to a new round of diplomatic friction between India and the United States, and India again appears to be avoiding the wheat trap.

Akshay Narang is a columnist who writes about international affairs and developments in the defense sector. The opinions expressed in this article are those of the author and do not represent the position of this publication.

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