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Karnataka farmers, planters oppose proposed Free Trade Agreement

The proposed RCEP will harm and worsen the trade deficit in the plantation commodities and make things miserable for the sector, which is already suffering on account of low prices and high cost of production, says a study by the United Planters’ Association of Southern India (UPASI).

Written by Darshan Devaiah BP | Bengaluru, Mandya, Mangaluru | Updated: October 24, 2019 9:16:45 pm
Karnataka is ranked second after Gujarat in milk production. According to the state government, milk production in the State has presently reached 86 lakh litres a day.

Planters and farmers from Karnataka are opposing the Union government’s proposal to sign a Free Trade Agreement (FTA) for dairy products and plantation commodities under the Regional Comprehensive Economic Partnership (RCEP).

The Regional Comprehensive Economic Partnership (RCEP) is a proposed free trade agreement (FTA) between the ten member states of the Association of Southeast Asian Nations (ASEAN) that includes Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, Vietnam and its six FTA partners which consist of China, Japan, India, South Korea, Australia and New Zealand.

The farmers from Mandya, Mysuru, Shivamogga, Hassan and other districts staged a massive protest against the proposal as they are apprehensive that the duty-free import of milk products will affect their livelihood.

On Wednesday, ‘Mandya Zila Haalu Utpadakara Horata Samiti’, a milk producers’ association protested in Mandya. Sunanda Jayaram, Karnataka Rajya Raitha Sangha (KRRS) leader, said, “The RCEP agreement will allow duty-free import of milk, this will hit the dairy and agriculture sector in the country. The RCEP will also impact the employment of five crore people working in the dairy industry and affects the livelihood of 10 crore milk producers across the country.”

Karnataka is ranked second after Gujarat in milk production. According to the state government, milk production in the state has presently reached 86 lakh litres a day. Opposing the Centre’s proposal of importing dairy products from countries like New Zealand and Australia, former Karnataka Chief Minister, Siddaramaiah said, “Narendra Modi government’s proposal to sign free trade agreement of dairy products under RCEP is against the interests of our farmers and this shall be vehemently opposed. Dairy products of Australia and New Zealand are much cheaper, which will make it difficult for our farmers to compete in the market. This will impact their livelihoods, which was strengthened only after the White revolution.”

Referring to the initiatives taken in Karnataka to protect milk farmers, Siddaramaiah in his series of tweets, said: “Under Ksheera Dhare, we had increased the subsidy to producers to Rs 5 a litre. We also launched Ksheera Bhagya to ensure full utilisation of excess milk and address malnourishment issues in children. FTA will only nullify all these.”

Meanwhile, the planters in Karnataka are also worried about the proposed RCEP. Mangaluru based the Central Arecanut and Cocoa Marketing and Processing Cooperative (Campco) Ltd has written a letter to Karnataka Chief Minister BS Yediyurappa asking to recommend to the Central government to exclude arecanut and pepper from the scope of the proposed RCEP.

SR Satishchandra, president of Campco, said in his letter to the state government, “that farmers, who are already facing challenging times on account of low prices vis-à-vis high cost of production, will be facing serious implications. The rationale behind the request is to protect the interests of domestic farmers as the country is self-sufficient in the production of arecanut and pepper.”

According to Campco, the country produced more than 50 % of arecanut produced in the world. In India, the State produces the largest quantity of arecanut with 6.06 lakh tonnes coming from 19 districts. “That a majority of arecanut farmers have pepper as an inter-crop in their plantations. Pepper was placed as a special product in the highly sensitive list and arecanut in the exclusion list to protect the interests of domestic farmers. Hence, arecanut and pepper should be excluded from the final offer, and their exclusion from the list should be recommended to the Union government, Satishchandra added in the letter.

The proposed RCEP will harm and worsen the trade deficit in the plantation commodities and make things miserable for the sector, which is already suffering on account of low prices and high cost of production, says a study by the United Planters’ Association of Southern India (UPASI).

Natural Rubber (NR), pepper, coffee and tea are likely to come under intense competition and imports into the country are likely to increase over time, the study said.

UPASI reports that the plantation commodities like tea, coffee, natural rubber, cardamom, pepper were exposed to international competition from April 2001, when the quantitative restrictions were lifted as per the commitments under WTO. The signing of the ASEAN Agreement in 2009 opened up the Indian market further to the plantation producing countries like Indonesia, Vietnam, Malaysia, Thailand, among others.

Under the ASEAN Agreement, the import duties were gradually reduced since 2009 for tea, coffee and pepper, while natural rubber, cardamom and few tariff lines on coffee were kept under exclusion list. The current import tariff for ASEAN countries is 50 per cent for tea and coffee (100 per cent under WTO for other countries) and 51 per cent for pepper (70 per cent under WTO).

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