Indian Farmers Cheesed-off with Europe

By admin • May 7th, 2010

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The Indian government has expressed concerns about small farmers facing greater poverty resulting from strong pressure to open up its markets to cheese and other dairy produce from Europe.

India wants to exclude milk and cheese from the realms of the free trade agreement, under negotiation with the European Union, due to its dairy sector providing employment for 90 million people.

However, the latest round of talks that took place at the end of April, witnessed European Union officials increasing their efforts to have India’s agricultural markets liberalised. According to sources in Brussels, moves to open up all agricultural sectors are under discussion. The source said “It has not yet been decided which products will be liberalised and India’s sensitivities will certainly be taken into account as negotiations progress.

However, anti-poverty activists complain that, until now, the plight of India’s rural poor were shown little concern from the Eurpean Union.

Cheese- makers from Europe are insistant that protections offered to India’s poor should be dismantled, even though India’s dairy sector is critically important in providing work and income to farming families, particularly those that don’t own land.

The European Dairy Association argued that the imported food taxes levied by India  were “unrealistically high”, when the EU-India free trade agreement talks were launched in 2007. However, critics of the European Union’s stance argue that India’s farmers will be unable to withstand competition from European imports if such tariffs were to be scrapped. Often those imports have been highly subsidised and can be sold at lower prices than domestically produced food.

Sophie Powell from the fair trade organisation Traidcraft said, “The EU is pushing very aggressively to open up some of the key sectors in India that support huge numbers of producers and workers”. She added,  “For example, the dairy sector is one of the most pro-poor sectors in India as it provides income for millions of rural families, most of whom are landless or marginal farmers.”

Both the EU and India have set themselves an objective of removing 90 percent of the tariffs they apply to trade in goods between them in an eventual agreement. Negotiators are seeking to have this accord completed in time for a high-level EU-India meeting in October.

Women, making up 75 million of the emplyees in the sector, would bear the brunt of any moves to expose India’s dairy sector more to outside competition according to a 2009 study by the Centre for Trade and Development.

India takes in less than 0.5 percent of the European Union’s total agricultural exports even though it is one of the world’s most populous countries. High tariffs have been identified, by Europe’s dairy firms, as the main barrier to expanding commercial ties with India. India’s growing middle class is also regarded as offering great potential as buyers of the gourmet cheeses.

European milk farmers have been badly affected by decreasing prices paid to them in the last few years. It is because of this crisis, according to trade analysts,  that European Union officials have stepped up their efforts to include dairy within the realm of an agreement with India.

In January 2009, the EU reacted to the crises by resuming payment of  subsidies to exporters of cheese, skimmed milk powder and butter. Such subsidies — widely considered as harmful to farmers in poorer countries, where markets have been flooded by European produce — had been suspended in 2007.

According to Paul Goodison from the European Research Office, a watchdog on trade relations, the European Union is “very keen to get any market opening” it can abroad in a bid to compensate for the troubles facing European milk farmers at home.

“This is blatantly unfair competition,” said Goodison. “It is a warning to any developing country. The EU makes its own rules when it is making trade agreements”.

source: ipsnews

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