Asean trade pact has Kerala worried | india | Hindustan Times
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Asean trade pact has Kerala worried

india Updated: Aug 18, 2009 23:56 IST
Ramesh Babu
Ramesh Babu
Hindustan Times
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Two years after he cleared his two-acre coconut farm to plant rubber saplings, Ramachandran Nadar suddenly finds his back against the wall.

Thanks to the free trade agreement (FTA) India signed last week with the Association of South-East Asian Nations (Asean), the 46-year-old farmer from Kattakada village in Kerala isn’t sure if his decision will pay off.

Nadar fears synthetic rubber from Vietnam and Myanmar could now flood the Indian market and make his natural rubber non-stretchable.

Nadar isn’t alone.

Scores of cash crop and hill-produce farmers and fishermen foresee a bleak future because of the agreement that government officials claim will boost trade between India and the Asean.

The 10-country grouping includes Malaysia, Singapore, Thailand, Myanmar, Vietnam, Laos, Cambodia, Brunei, Indonesia and the Philippines.

There is a significant overlap in farm produce of these countries and Kerala — tea, coffee, rubber, pepper and cardamom.

Under the agreement, India has agreed to cut import duties on tea and coffee to 45 per cent, pepper to 50 per cent, crude palm oil to 37.5 per cent and refined palm oil to 45 per cent. And, rubber has been included in the negative list.

That is why Kerala opposition leader Ooomen Chandy rushed to Delhi and took a team of MPs to Prime Minister Manmohan Singh.
Defence Minister A.K. Antony, who is a Rajya Sabha member from Kerala, also supported their concerns.

“It has to be done in a calibrated way. But the Centre rushed in, exposing the ailing farmers to a greater risk,” said Thomas Iassac, finance minister in the Left Front government in Kerala.

There are huge differences in productivity, labour costs, inputs and quality in the participating countries, which can’t be easily bridged.

For example, in Kerala productivity of pepper is 380 kg per hectare, while in Vietnam it is 1,000 kg per hectare and Indonesia 3,000 kg.

“How can we compete with them all of a sudden?” asked Sreedharan Nambiar, a pepper producer from Thalasserry in north of Kerala. Planters’ and fishermen groups have already planned a series of protests.

“It seems to be a better deal for Asean than India. But we have to get details – conditions, period and negative lists – before jumping to a conclusion,” said Verghese Thomas, chairman of the state agricultural board.