RCEP: Experts warn of adverse impact on agriculture, dairy sector ahead of PM Modi’s Bangkok visit

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November 1, 2019 7:22 PM

RCEP: Farmers have called for a nationwide protest on November 4 when PM Modi will be meeting with the leaders of ASEAN and five other countries in Bangkok.

RCEP, India Asean, Asean plus six, Narendra Modi, Agriculture, New Zealand, AustraliaRCEP is facing resistance from farmers and other activists.

Regional Comprehensive Economic Partnership (RCEP): Farmers bodies and experts have expressed serious concerns over the inclusion of farm and dairy products in the Regional Comprehensive Partnership Agreement (RCEP) that is under discussion between ASEAN and 6 other nations including India. While farmers have called for a nationwide protest on November 4 when Prime Minister Modi will be meeting the leaders of Asean and five other countries, experts have called for keeping the agriculture out of the proposed free trade agreement. The country does not need to import any agricultural products except edible oils said Ajay Dua, former secretary, ministry of commerce and industries, adding that the threat of dumping of dairy products from New Zealand and Australia is real and it will affect the livelihood of Indian farmers.

Prime Minister Narendra Modi is visiting Bangkok, from November 2 to 4, to participate in a series of meetings, including the one related to RCEP.

“New Zealand produces 9 times more dairy products than its own requirements. And the number of cattle is also high in the country. There are just 10,000 large dairy farmers but they are large farmers with over a thousand cattle each,” said Ajay Dua, who was associated with several trade negotiations in the past including WTO.

“Indian farmers have just one or two cattle and it’s a question of livelihood for them, for the farmers in New Zealand and Australia it’s an issue of commercialisation,” he told Financial Express Online.

Farmers organisations will stage a nationwide protest on November 4 when Prime Minister Narendra Modi will be meeting with ASEAN and other leaders in Bangkok. According to the reports, Indian negotiators have already finished major part of the negotiation and some tricky issues will be sorted out before the summit meeting on Monday. According to the sources, most of the discussion is complete and Prime Minister Narendra Modi would have to take a political call on signing the RCEP.

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Given the possibiliy of adverse impact on the ariculture sector, several farmers organisations have already staged a protest against the deal on October 27 in all the major farming states. They took out protest marches in Punjab, Haryana, Karnataka, Andhra Pradesh, Tamil Nadu, Kerala, Uttar Pradesh, Madhya Pradesh, Bihar, Rajasthan and some other states.

Rajya Sabha member Jairam Ramesh, who was rural development minister in the previous UPA government, has attacked the Modi government saying that it will be the third biggest jolt to the country’s economy after noteban and GST. He also asked the government to make the details of negotiations public.

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According to the data used for PM Kisan Samman Nidhi, there are 10 crore small and marginal farmers in the country. Most of them also raise cattle to supplement their meager farm incomes which depends on the vagaries of south-west monsoon while milk provides them ready cash.

The country has sufficient production and stock of staple food items except for oilseeds and pulses. Though the country’s edible oil requirements are long term in nature, the import of pulses is mostly cyclical in nature. Experts fear that the inclusion of agriculture in RCEP may lead to dumping of Malaysian palm oil in the country.

“Once you have included agriculture as a whole then we might face the issue of dumping. So it is good not only to keep dairying out but we should keep the entire agriculture sector out of it,” said Ajay Dua.

Experts also point out to the lack of sufficient data and information to negotiate a complex multilateral trade deal like RCEP.

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NR Bhanumurthy, a professor of economics at the National Institute of Public Finance and Policy (NIPFP) says that track record of previous trade agreements has really been mixed and there is a need to study their impact on the country’s economy.

“We don’t have strong databases to understand and negotiate a good trade deal with regard to some of the commodities. When price fluctuations happen then no one knows what will happen to the price of imported commodities, particularly in the case of agricultural commodities,” said Prof Bhanumurthy in an interaction with Financial Express Online.

He warned about the adverse consequences of hastily entering into a trade deal involving agriculture.

“The problem is that it is difficult to increase the export of agricultural commodities while their imports can be increased very easily,” he said.

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