dairy

Why Indian Dairy Sector Against Free Trade? – Free PDF Download

 

Background

Background

The News

The News

  • According to BKU, Indian farmers will oppose the Comprehensive Economic Cooperation Agreement (CECA) between India and Australia if it throws open the country’s dairy sector for Australian dairy majors.
  • India and Australia have been in discussion since October 2021 for concluding a “full” CECA by the end of 2022, infact both sides have fast-tracked the process to secure an interim agreement even before that.
  • According to industry sources, It is understood that coal and dairy will form important components of the India-Australia trade deal. Apparently, Australia is willing to make an attractive offer as a quid pro quo if India opens up the dairy sector.

Why Dairy Sector opposing FTA?

  • Indian dairy sector is one of the few success stories in India’s agricultural history.
  • The country’s milk output has so far more than doubled from 79.66 million tonnes in 2000, making it the world’s largest producer and consumer of milk.
  • In fact, since 2000, Indian policy has consciously encouraged the growth of private milk companies. At present, Indian firms are forced to buy milk from Indian farmers.
  • Foreign dairy products are subjected to applied tariff in India of about 35%.

Why Dairy Sector opposing FTA?

  • If India had signed RCEP, the bound tariff would have fallen to zero on dairy products. It would have then been far more profitable for private firms in India to import milk from New Zealand or Australia rather than buy it from Indian farmers.
  • According to Industry experts, Indian farmers are paid an estimated 60% of milk prices whereas it is only 23% and 24% in New Zealand and Australia respectively.
  • Australia (Also New Zealand) (Both are part of RECP) are major players in the global milk trade. FTA with Australia will lead to reduced tariff on dairy opening up Indian market making dairy farmers vulnerable.
  • Hence, in India there is fierce opposition to the agreement.

Deal or no Deal… But dairy sector needs reforms

 

 

 

Latest Burning Issues | Free PDF