Asean FTA wont hurt Kerala farmers

Written by Rituparna Bhuyan | New Delhi | Updated: Sep 1 2009, 06:51am hrs
In a bid to allay fears on the Free Trade Agreement (FTA) between India and Association of South East Asian Nations (Asean), concluded on August 13, commerce minister Anand Sharma has written a letter to Kerala chief minister VS Achuthanandan, assuring him that the pact will not impact cash crop farmers and fishermen of the state.

The dealwhich was signed in Bangkokwill lead to cut in import tariffs in 80% of the 5,000 broad list of products that India trades with the rest of the world, which accounts for three quarters of the bilateral trade between the country and Asean. In addition, about 600 products will see duty cuts over a period of up to 10 years while 489 items, which includes farm goods, select auto-components and items manufactured by the small scale industry, will not see any reduction in tariffs.

Pointing that there were protracted consultations with stakeholders before the negotiations on the pact were sealed, Sharma in a letter dated August 25 said I wish to allay any apprehensions you may have about the India-Asean trade in goods agreement and look forward to clarifying any lingering doubts,.

The letter comes about a month after Achuthanandan wrote a missive to Prime Minister Manmohan Singh, warning him of adverse impact on the Keralas economy, due to liberalised import of rubber, tea, pepper, marine products and edible oil in to the country, due to the trade pact. These are the very commodities on which Kerala always had an edge. With liberalised imports, prices of these commodities are bound to crash leading to a direct fall in income of farmers,. The letter also warned of over a million job losses in the states fishing industry, because of liberalized sea food imports.

Kerala chief minister also met Singh in New Delhi on August 3. Significantly key functionaries of the UPA government-defence minister AK Antony and law minister Veerappa Moily - had also expressed their concerns about the deal, when it was discussed for ratification by the Cabinet. Sharmas letter attempts to allay concerns in Kerala by pointing that many of farm items produced in the state will either see no duty cut, or the paring of tariffs will be partial and that too spread across a span of about 10 years.

Indias schedule safeguards the sensitivities of the agriculture sector. Protection of a large number of agricultural commodities has been ensured under the negative list, where no tariff concessions have been offered to the Asean countries. This list includes items produced in Kerala such as natural rubber, areca nut, coconut, cashew nut, cardamom, fish, and shrimp, Sharma stressed.

The commerce minister also pointed out that duty cuts on highly sensitive farm goods like black tea, coffee, pepper, crude palm oil and refined palm oil will be spread across a period of 10 years-from January 2010 to December, 2019. At the end of the gradual cuts, the final duty on the sensitive farm products will be in the range of 37.5% to 50%. Mentioning that the present rate of import duty on crude palm oil is 0% and refined palm oil is 7.5%,

Sharma added For some products we have not really given anything tangible viz, the tariff cut does not yield any additional ground to the prospective exporting country,.

Sharma also said a group of ministers set up by the Cabinet would recommend measures to carry out structural reforms in the plantations sector. I am sure that the long standing problems of the sector will be squarely addressed and lasting solutions devised, Sharmas letter said.