Groups Warn Poultry & Dairy Sectors 'Face Disaster'

INDIA - Advocacy groups in India say the proposed deal between India and the EU at the World Trade Organization (WTO) would violate the right to food of a vast segment of the Indian population, particularly those who rely on the poultry and dairy sectors.
calendar icon 23 December 2011
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As the Eighth Ministerial meeting of the World Trade Organization (WTO) kicked off in Geneva last week, a group of non-government organisations exposed the devastating potential of a free trade agreement currently being negotiated between the European Union and India, reports Asia Times. If passed, they say the deal would make a mockery of all WTO rules and regulations.

A recent impact assessment on the right to food of the EU-India FTA, researched and compiled by leading advocacy groups including the Delhi-based Third World Network (TWN), the Indian non-governmental organisation (NGO) Anthra and Germany charities Misereor, Glopolis and the Heinrich Boll Foundation, concluded that the proposed deal would violate the right to food of a vast segment of the Indian population, particularly those who rely on the poultry and dairy sectors.

Additionally, the zero-tariffs clause of the free trade agreement (FTA) could lacerate the retail sector by stripping small retailers of any protection against corporate giants.

Having sat on the table since 2007, the agreement could be sealed as early as next year, an outcome that many experts see as "disastrous" for the local economy.

"The EU is asking India to cut its tariffs to zero on at least 92 per cent of all imports, including industrial and agricultural goods," Ranja Sengupta, senior researcher at TWN told Inter Press Service (IPS). "Considering that trade with EU represents 60% of India's total international trade, this would be a disaster, particularly in hitherto protected sectors, like agriculture."

"Our [impact statement] focuses on the dairy and poultry sectors because they employ a large number of very small farmers, many of them operating in their backyards in order to subsist," Sengupta said.

Given that the dairy sector provides 90 millions jobs, slashing tariffs will likely result in a repeat performance of the 1999 milk crisis in India, when EU imports of skimmed milk powder rose from 600 tonnes to 25,000 tonnes, effectively destroying the country's "white revolution" for milk self-sufficiency. Similarly, the pending FTA will flood the market with imports, depress producer prices, reduce incomes and eventually increase debt.

The poultry sector, which consists of 96 million small, landless agricultural households that manage 85% of the poultry stock, is currently guarded by a 100 per cent tariff that actually prohibits imports.

But the FTA could kill these protections, according to Asia Times. According to Sengupta, Indians consume more poultry legs than breasts and vice versa in Europe. If the EU dumped its poultry legs on the local market, India would not be able to retaliate by exporting poultry breasts to European markets because of the latter's strict health and safety standards.

The WTO advocates lowering tariffs, not removing them altogether. Additionally, the agenda for the ministerial meeting this week includes the question of industrialized countries eliminating government subsidies.

"In sharp contrast, FTAs like the one being negotiated between India and the EU insist on the complete elimination of tariffs but contain no binding clauses about eliminating subsidies," Sengupta said.

Experts are also concerned about the FTA's impact on the retail sector, the second-largest employer in India after agriculture. In the WTO, services trade liberalization is a relatively flexible mechanism because it allows countries themselves to decide which sectors to open up to foreign competition.

"This is a very sensitive issue in the country but unfortunately the public is unaware of the serious impact of the FTA because negotiations are often conducted in secret. Contrary to the WTO, the FTA does not need to be ratified by the national parliament and state governments are not even consulted," Sengupta told IPS, according to Asia Times.

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