October 01, 2023

AIKS Demands Roll Back of Tariff Reductions on US Agri Products

Below we publish the statement issued by the All India Kisan Sabha (AIKS), on September 26.

THE Narendra Modi led union government and the US government decided at a joint meeting in June to resolve the pending trade disputes between the two countries at the World Trade Organisation (WTO). Among the multiple disputes, the last to be clinched was regarding the import restriction on poultry products such as frozen duck and turkey from the US because of concerns regarding Avian Flu, filed by India in 2012. In the name of dispute resolution, the Indian government has surrendered interests of Indian farmers. It has provided tariff reductions on some US products, which includes chickpeas, lentils, almonds, walnuts, apples among others. This was announced in a congratulatory note by the office of the US trade representatives, which said, “These tariff cuts will expand economic opportunities for US agricultural producers in a critical market and help bring more US products to customers in India.” The United States and European Union is known to have used the dispute resolution mechanism of the WTO to raise cases against developing countries in order to garner compromises to its advantage.

Further, in an effort to salvage the Indian government’s position following strong protests, the ministry of commerce issued a press brief noting that “Most Favoured Nation duty of 50 per cent and 100 per cent continues to be applicable on US apples and walnuts as only additional 20 per cent duty is removed”. The note claims that removal of the additional ‘retaliatory tariff’ on US apples, nuts and lentils would not hamper the Indian producers. However, this comes as false assurance and this closed door ‘dispute resolution’ bulldozes the livelihoods of hundreds of Indian farmers. Previously in 2020, India had agreed to open up its poultry and dairy markets to seal the Indo-US Free Trade Agreement. These reductions in tariffs indicate a kow-towing of the Indian government to the wishes of the United States at the cost of Indian farmers, whose prospects of a remunerative income will be further compromised as a result of inflow and dumping of cheaper agricultural products from the US. 

At earlier times, India along with other developing countries have raised questions regarding the lopsided WTO’s agreement on agriculture and the most favoured nation (MFN) clause, which are biased in favour of developed countries, who provide huge levels of subsidies to its farmers while targeting the subsidies and price support such as MSP provided to poorer and marginal producers of the developing countries. According to estimates, while an American farmer receives subsidies worth 61,286 dollars, an Indian farmer receives just 282 dollars. This creates an inequitable ground for competition between the ‘big’ American apple farmer, who additionally enjoys the benefit of scales, and Indian apple farmers cultivating on small landholdings. The further reduction of tariffs based on the distorting MFN clause, besides the challenges of production and infrastructure tightens the noose for the Indian apple growers, spread across the mountainous states.

India has seen a deficit in production of masur and other pulses for some time. Reduction in tariffs for American lentils adds to the disincentives for Indian small and marginal producers to grow pulses which anyways suffer from low market prices due to lack of procurement by the government.

The All India Kisan Sabha demands immediate roll back of the tariff reductions provided to various US origin agricultural commodities, including poultry, apples, nuts and lentils. It also demands that the Indian government should not enter free trade agreements in agriculture which has been detrimental for the Indian farmers. AIKS reiterates a long standing demand to bring agriculture out of the WTO’s agreement on agriculture.