Inclusion Of Rubber In Wto Agri Commodities List Urged

The United Planters' Association of Southern India (UPASI) yesterday demanded inclusion of rubber in agricultural commodities list by the WTO as it was classified under the plantation category and taxed under agricultural goods.

"Tea, coffee, pepper and cardamom are classified under 'agricultural commodities' whereas natural rubber has been left out, though income from the commodity is taxed under the agricultural income tax acts by state governments," E K Joseph, body's vice president said.

He said since the entire income from natural rubber was treated as agricultural income there was no justification to exclude it from the purview of agriculture.

"The Rubber industry faces several disadvantages, including low bound rates due to its exclusion from agriculture, under the WTO," Joseph said.

 

He said while an import duty of 150 per cent could be levied on tea and it could be raised up to 100 per cent on coffee, cardamom and pepper, India can implement only 25 per cent duty on rubber.

"This exposes our rubber industry to cheap imports which would be heightened with the removal of quantitative restrictions (QRs) in 2001. Already, cheap imports have adversely affected domestic producers," Joseph said.

He said though the country's average domestic production of around 6.2 lakh tonne was equal to consumption, the country still imported rubber from Malaysia and other nations which led to a slump in the domestic prices.

Joseph said as against the benchmark price of Rs 34.05 per kg for rubber, the average price realised in the Indian market during January to July had only been Rs 31.91, which was well below the cost of production.

UPASI said in the forthcoming WTO negotiations, India should ask for an increase in bound rate of natural rubber to 150 per cent as it would help the domestic plantation industry which was saddled with huge stocks due to low international prices.

India is expected to have a surplus of 58,000 tonne of natural rubber in 2000-01 at supply levels of 8.39 lakh tonne as against a demand of 7.81 lakh tonne. The price of Indian rubber in July stood at Rs 32.53 per kg as against Rs 28.57 in the international markets.

"Moreover, according to the WTO stipulations, import duty in case of agricultural commodities has to be reduced by 24 per cent of the basic duty each year, while for non-agricultural commodities, the reduction has to be at a higher rate of 30 per cent," he said.

This factor also exposes our market to cheap imports, Joseph added.

He said agricultural commodities came under the basket of Green Box due to which they enjoyed certain concessions like developmental subsidies and added this also gave the nations bargaining power on grounds that they were eco-friendly.

"But, rubber remained cut out of the concessions since it is not categorised as an agricultural commodity, although the rubber is from a tree and is ecological and eco-friendly," he added.