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Delhi, 8 November 2019
India Out of RCEP
RAISING GLOBAL COMPETITIVENESS
By Dhurjati Mukherjee
Amidst farmers’ protests and resentment,
India has taken a judicious decision to opt out of the Regional Comprehensive
Economic Partnership (RCEP), keeping in view the country’s interests.
Obviously, the outcome may go against the interests of China as it was
desperate to become the unchecked dominant economic power of Asia and flood our
domestic market with its products. As is well known, the signing of the RCEP
would have forced the government to reduce import duties on several goods.
Experts estimate that the Indian government stood to lose around Rs 50,000
crore, or even more, if it had agreed to reduce duties.
Recently farmers’ representatives had
decided to intensify protests if the free trade agreement between India and 15
Asia-Pacific region countries (of RCEP) was signed as this would have paved the
way to flood local markets with inexpensive farm, dairy and plantation
products. Incidentally, these 16 countries account for about 25 per cent of
global GDP and around 30 per cent of global trade. It is understood that
producers of coconut and palm oil, areca nut, tea, coffee, rubber and cardamom
as also dairy products would have been the ones at the greatest risk, if the
agreement was signed.
By walking out of RCEP, India has been bold
enough to point out that it is unwilling to do business on their terms but
remain open for business. As the Prime Minister rightly observed that “the
present form of the RCEP agreement does not fully reflect the basic spirit and
the agreed principles of RCEP”. However, India’s ASEAN FTA will continue though
even that is being renegotiated with Thailand and South Korea. According to
government sources, India would prefer to pursue bilateral agreements for some
time.
Members of the Alliance for Sustainable and
Holistic Agriculture (ASHA), Bharatiya Kisan Union (BKU) and the Indian
Coordination Committee Farmers Movement (ICCFM) urged the State governments to oppose
the RCEP as that would affect farmers. Foreign farm products would be cheaper
because of the comparative efficiency advantage of foreign or because they are
subsidised by foreign governments.
According to farmer group representatives,
dairy cooperatives now get about Rs 280 to Rs 300 for a kg of milk powder.
Though India is the largest producer of milk in the world, most of the
production is consumed internally and it is apprehended that milk powder from
Australia and New Zealand might become available at Rs 180 to Rs 200 a kg. Also
rubber imports from Malaysia would be sold much cheaper in the domestic market.
This speculative news was indeed
distressing for farmers as this sector has been in a crisis for quite some
time, specially since 2017. Instead of opening up avenues and export markets,
it is possibly a right decision to examine the whole issue and not sign the
RCEP agreement as this would have had a cascading effect and lakhs of farmers
would be affected, directly or indirectly.
The question remains why India has not been
competitive in the global arena? Why is it that these foreign farm products are
cheaper? We should examine our subsidy in relation to those offered by foreign
governments and provide similar incentives. Moreover, agricultural research has
to be diversified, keeping in view the prices prevalent in the global arena.
It needs to be stated here that India’s
agrarian future, whether gene based or drone based, continues to be
productivity focused drawing upon the green revolution model. Alternative
visions based on different kinds of crop choices, farming systems, technologies
and practices have not been given due emphasis in the last few decades by
governmental and non-governmental organisations. In fact, it would not be out
of context to state that agriculture with 12 per cent contribution to the GDP
has been somewhat neglected keeping in view the large number of people
dependent on this sector for their livelihood.
Productivity of the entire gamut of
agricultural produce is quite low except for two staple cereals. It needs to be
mentioned here that productivity of a single grain per unit of land in a given
season is a misleading metric as it fails to account for multiple products and
crops that land can provide in the same season and that, in many places,
multiple crops are grown on the same land across seasons. Plus, what about the feasibility
of land to continue producing in future?
It is a well known fact that the high
levels of wheat have come at the cost of depleting/replacing soils, groundwater
and the livestock economy in ways that are non-replenishable, non-renewable and
carbon emitting. Thus, the needs for diversification of crops – some of which
are value added – have been aired by agricultural scientists at conferences and
seminars but no effective plan of action at the grass-root has been evolved.
It is in this connection that one may refer
to the large imports of oilseeds and pulses from Indonesia, Malaysia and
Myanmar. Imports fulfilled nearly 35 per cent of India’s domestic requirement
of oilseeds and over 20 per cent of pulses, according to available data around
2-3 years ago and the situation has remained unchanged. The rise in the prices
of pulses has put them beyond the reach of the low income groups.
Thus, diversification of the agri sector
with value addition in horticulture, floriculture, pulses and spices and
on-farm processing for production of various types of oil, both for the
domestic and export markets, is the need of the day so as to ensure higher incomes
on a sustained basis. One needs to mention here that oil seeds production of
the country is way below world average and needs to be boosted up with proper
usage of micronutrients and mechanisation apart from increasing processing
centres with latest technology.
Thus the hype about self-sufficiency of
rice and wheat has no meaning as it does not help in complete nutrition. Recent
research of the National Institute of Nutrition revealed that cereal-heavy
diets of the poor and the EWS have contributed to an epidemic of anaemia along
with creating malnutrition and nutrient deprivation, specially among women and
children. Very little efforts at the ground level were initiated to harvest
oilseeds and pulses in a big way through training and also technical guidance
by the high profile ICAR.
Through proper technical guidance and
subsidies that our competitors give, our country can definitely be competitive.
Why do we have to bother if foreign products enter the domestic market even though
such government decision is undoubtedly wrong and needs to be examined by a
panel of economists and agricultural scientists?
India very rightly withstood pressure and
not signed the trade pact, more so in a situation where the global economy has
changed considerably with the US-China trade war and the Indian economy
struggling. However, one cannot deny that prospects of India’s increasing
exports are quite high. Thus it is imperative to evolve a new strategy, which
may be formulated with agricultural scientists, traders and representatives of
farmers’ organisations, preferably with a State-wise or better still a district-wise
action plan, to professionalise our agricultural production, concentrate on
certain crops and increase overall productivity.---INFA
(Copyright, India News & Feature
Alliance)
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