Monday, May 03, 2010

The cheese tariffs of India

One of the important free trade talks going on now is between the European Union and India. Both countries are negotiating to remove 90 percent of all tariffs they apply to trades. The possible removal of one such tariff has anti-poverty advocates worried.

The worrisome tariff is the one for India's milk and dairy products. Dairy employs 90 million Indians, a great percentage of those are female. Anit-poverty activists fear European cheese flooding the market and hurting the fortunes of the many Indians who work in dairy.

From the IPS, writer David Cronin explains the trade talks.

While India's dairy sector is of critical importance in providing work and income to farmers, particularly those who do not own land, Europe's cheese- makers have been adamant that protections offered to India's poor should be dismantled.

In 2007 -- the year that talks aimed at reaching an EU-India free trade agreement were launched -- the European Dairy Association contended that the taxes levied by the Delhi authorities on imported food were "unrealistically high." But critics of the EU's trade strategies argue that scrapping such tariffs would leave India's farmers unable to withstand competition from European imports. Often those imports have been highly subsidised and can be sold at lower prices than domestically produced food.

"The EU is pushing very aggressively to open up some of the key sectors in India that support huge numbers of producers and workers," said Sophie Powell from the fair trade organisation Traidcraft. "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.

Sandeep Chachra, director of ActionAid in India, commented: "Over 80 percent of the Indian peasantry are small and marginal farmers. For their livelihoods and survival, millions from this group depend on the dairy sector to supplement their meagre incomes. This sector cannot be opened up without adequate protection to face the EU's highly subsidised and protected dairy sector. That would be a highly uneven competition on unequal terms, disruptive to the lives and livelihoods of small and marginal Indian farmers."

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