India-Asean FTA irks Kerala

The India-Asean free trade deal has left farmers in Kerala a worried lot. The state government too is flustered by the impending impact the agreement would have on the farming community here.

Talking to Business Standard, Kerala’s Agriculture Production Commissioner K Jayakumar said such a deal would prove bad for the farmers engaged in cultivating coconuts, spices, tea and coffee in Kerala.

“Opening the doors to substitutes is harmful. The Kerala farmers who hold an edge in the spices and coconut oil sector would suffer. The government, within its framework, will continue to oppose such moves,” he added.

Cochin Oil Merchants Association (COMA) director Talat Mehboob said the deal had everything in it to break the backbone of coconut farmers in the state.

“The tariff reduction in palm oil is to be seen as bringing in a major effect on the coconut farmers in the state. The coconut oil sector is already reeling under pressure. The imported palm oil will come at a much lower price than what the coconut oil producers currently get,” he said, adding that the free trade deal would only add to the woes of the coconut farmers here as India was already seeing palm kernel oil making its presence felt in large volumes.

“Palm kernel oil is a close substitute of coconut oil and substitution takes place at very thin difference. Mixing of palm kernel oil with coconut oil before it comes to the market will be rampant. The end losers will be the farmers,” said Mehboob.

The deal, when inked, would enable palm oil take over the market. This could lead to the destruction of the coconut oil sector as the shift toward palm oil would hit the demand for coconut oil, Mehboob said.

On the possible impact on the plantation sector, United Planters’ Association Of Southern India (UPASI) secretary general Ullas Menon said that the policies should ensure there is a level playing field so that farmers in the country are not affected adversely.

“There is a huge cost difference currently due to government polices, which makes it difficult to stay in competition,” he said.