Search the Internet          Tips  Sites: Finance, Investment

EU, US subsidies swamping dairy sector, says Kurien

Devendra Vyas in Ahmedabad

The Indian dairy industry is in danger of being swamped overseas as global prices are being determined by producer and export subsidies offered by the European Union and US government.

Higher subsidies paid to farmers there have severely affected export price realisation in the international market.

The Indian dairy sector has appealed to the government to present the country's case at WTO and also raise tariff barriers within permitted WTO norms to protect the domestic market from inflow of subsidised dairy products from the western world.

Dr V Kurien, chairman of National Co-Operative Dairy Federation of India Ltd, said: " There are genuine threats to India's dairy industry from highly subsidised and extremely unfair exports of milk products by the US and EU. Subsidies and refunds have now been raised several times in Europe as well as in the US and accelerated the falling trend in world market prices. Butter export subsidy paid by the European Union is currently at a 5 year high and butter export refunds are now equivalent to 60 per cent of the EU market price."

Kurien felt urgent steps should be undertaken to renegotiate the bound rate of duty for tariff line 0405 from 40 to 75 per cent through WTO.

The government must immediately enhance customs duty for tariff line 0405 which includes butter and butter oil.

The reform of the European Union dairy policy, originally planned for the 2000-03 period, has been postponed till 2004-08.

The EU has not fulfilled its obligations under the Marrakesh agreement on reduction of export subsidies, he pointed out.

In the last five years, imports of butter oil into India has grown at 7.7 per cent per annum. While the volume of imports of butter oil in absolute terms was not significant, this trend has already had the effect of dampening prices of ghee owing to rumours of large imports in future.

Powered by

ALSO READ:
Bill Gates in India
More Money Headlines