What are your thoghts about the Indo European Free Trade Agreements?

I don't usually go with RS Narayanan's views on many issues. He is telling many right things no doubt but in wrong ways, generating more conflict than clarity. But in this article he had exactly reflected the right fears of well meaning people. We can not have the food security by committing to such exports when our own internal demands are met frugally. The ration quota is hardly adequate and the exports would be committed even under domestic shortages.

The profits would be least and the imports agreed like foreign liquor are least intended to help us, except to help foreign profiteers! The projections for enhanced free trade in food sector are likely to hit the farm sector, already suffering due to govt apathy to alleviate the problems of sorts! The BMS also had rightly pointed out the lack of trasparency on the provisions of a crucial agreement that would impact the nation significantly!

I got the back issue of Dinamani from a neighbour and read Mr RSN's article. I seem to go with him on several counts. Like:

1. Though there was domestic (PDS) needs / (market) demands (for release in case of price rise), 20 lakh tonnes of wheat was allowed to be exported, for want of space in their go downs! It was NOT surplus stock even for the sub optimal quantity distributed through PDS! There was no adequate storage for the food grains procured at Govt rates from farmers! Further it has always been the case with us that the stocks are exported when the global prices are low!!! The WTO regulatory clauses are invariably adverse to our economy!

2. In a country with massive population below poverty line, the govt talks of Food Security and also allows massive exports of food grains at loss, citing committed export agreements! There is no intent to strengthen the storage infra for optimal storage and fair distribution among the needy or take timely market intervention when prices are artificially hiked by online speculative traders! How would they ever implement the Food Security or Nutritional Security ever? They would only reduce the families under BPL line to ridiculous low levels as done by Planning Commission!

3. The present Free Trade Agreement on Food grain exports with EU commits to hike the present level of raw materials from present 5% level to 17% by 2020, of which the food grains would be 24% , meat and milk 10% and agro food items 6% ! It is needless to say that our govt would keep this ambitious commitments even at the cost of our domestic demands and not hesitate to import the same from other countries at higher prices!

4. According to experts, if the value of total imports (including agro food items) from EU is considered with our export earnings, we would stand to lose as much as $ 50,000,000 ultimately! How is this deal of the developing nation with the industrialized rich European combine?! This would end up in losses to the farmers, food processors, dairy products and fishery product exporters too!

5. Presently our exports to EU is just 3% of the imports from them. The export taxes vary according to goods from 32 to 115%. For EU market it is 14%. There is exemption for vegetables and fruits only, but still there are other collections upto22%. Edible oils suffer 73% tax. But would have to forego the export taxes under FTA with EU! Besides there are technical hurdles as well.

6. Though the export taxes in EU are low, the farmers are amply compensated with subsidies for exportable agro products! Among the farmer friendly activities the incentives for strengthening the Domestic and export markets are also many. But in India only Tatas and Ambanis would get incentives not the farming community! After selling our agro products to EU we would get their foreign wines and whiskeys only at high rates! If we consider the respective policies, relaxation of export taxation etc of the two countries, the myth of sustainable growth would be exposed.

7. We revel in fake surplus by reducing the PDS allocations to sub optimal levels. The exports are uncalled for. If we are pushed to import food grain at some time, the EU would not hesitate to bring blocks and earn hefty profits if one looks at the track records of business with them!

8. The author closes with few significant remarks: In India, there is no contact of Central Agricultural Policy generators or foreign Agreement negotiators on Export-imports and the civil society members or farmers’ forum leaders or even the State Govts!! The trade lobby and the politicians decide everything in their own skewed wisdom and end the deals !

9. Farmers are just producers, not exporters. Recently it was known from media that the coconut production in Sri Lanka and Phillippines had fallen low and there was good prospects for profit to coconut producers due to exports to these countries! The cost of coconuts in Tamilnadu hiked to Rs 10 – 15 in retail due to exports only it was told. But the farmers were paid just Rs 4 to 4.50 per unhusked nuts as usual! The labour who picks nuts, the transporter, the Commisssion Agent who procures the nuts, dehusks and forwards the produce (husk income is bonus)to sellers and the export traders – all earn well, but the farmer gets the same old price!

10. Due to global recession there has been a steep fall in our export business in July to August 2011 (just one month alone) to a tune of 44% incurring a deficit of $14,000,000,000, which would have to be made up by exporting food grains at loss, to bridge the shortfall! That is the globalization ‘’benefit’’ to us!

What more to add on these ground level infos that are self explanatory?!