Farmers’ body flags concern over relaxation of import norms on US almonds, poultry

Indian and US trade representatives held bilateral talks on the sidelines of the recently concluded G20 meetings in Delhi. On September 8, US trade representative Katherine Tai announced the resolution of several stalled issues since the last many years.

“United States and India opens a new chapter of bilateral cooperation that will deepen the trade relationship…,” Tai was quoted as saying.

Relaxation of import duties, which had formed parts of the discussions, has raised concern of various farm groups. In particular, the Samyukta Kisan Morcha has expressed grave concern about the relaxation of import duties on walnuts, chicken lentils, apples among other commodities.

The India-US tariff war started in 2017, when the United States had removed India from the list of the US Generalized System of Preference (GSP), which had paved the way for duty-free exports.

In retaliation, India had imposed import tariffs on walnuts, almonds and 26 other items. “Now, the Government of India is reducing all these increased duties without getting any trade benefit for India,” read the statement by the Samyukta Kisan Morcha.

In case of walnuts and almonds, US is the largest producer and exporter of both. “Almonds was the top US agricultural export to India with a value of $657 million in 2017. India is the largest importer of US almonds, leading the country to topple China and Spain to emerge as the world’s largest consumer of walnut in recent times.

Between August 1, 2016, and May 31, 2017 (before increase import duty), California has shipped 201.8 million pounds of almonds to India, up 12% from a year ago, according to the Almond Board of California. The Indian increase in almond tariff amounts to about 20 cents a pound for shelled almonds and 4 cents a pound for unshelled almonds. The tariff increase stopped almost 70 percent of the import from US,” the statement read.

In case of walnuts, India’s domestic production (6.07 lakh tonnes per year) is the second highest in the world.
The decision to impose 100 per cent import duty has helped Indian growers.

The reduction of import duty, the statement said, would put Indian growers at a loss. The farmers’ body further said given walnut is grown in Himachal Pradesh and other Himalayan states, development of tourism has reached its limit given the environmental fragility of the states.

Thus, development of high-value agriculture was the only way to ensure the development of such states.
Talking about the reduction of duty on chicken, duck and other meat imports, the Samyukta Kisan Morcha said can cause serious problems for the poultry and other industries in India.

The Indian poultry industry has seen an investment of over Rs 2.10 lakh crores, of which 70 per cent is though bank loans.

Given the propensity of US poultry growers to incentivize the fillet (breast ) meat over legs or other pieces, even with 100 per cent import duty, the chicken legs from US would be cheaper than domestically produced processed chicken.

“Such is the difference in costs, that even if India imposed a 100 per cent import duty, imported chicken legs will still be cheap in India. The cost of production for chicken legs is estimated at around $700-800 per tonne in the US. With 100 per cent duty, it would still be available at $1,500- 1,600 per tonne, while the cost of production of processed chicken in India is around $1,800 per tonne,” said the statement.

India had a protracted legal battle in the World Trade Organisation (WTO) in regards to this and recently lost the case.

India, the farmers’ body said, had led an alliance of developing countries to fight US subsidies. Thus, dilution of India’s stand (on import duty) would not only harm Indian growers but also be a let down on other developing countries. The Morcha has called for a rethink of the relaxation in import norms, which it said would be disastrous for Indian farm sector.