Monday 12 August 2013

Weakening trade barriers boon for Indian agri biz


Ahmedabad: India’s agricultural produce may have to wait a while before it tastes the fruit of global success, but Indian agri-business players are certain it is only a matter of time as western trade barriers are living on borrowed time. Inspite of pre-conference signs indicating that ensuing round of World Trade Organisation’s (WTO) ministerial talks at Hong Kong may yield little in terms of concrete advances, there is overwhelming optimism that American and European trade barriers will collapse over next two-three years. India is a force to reckon with, says icecream manufacturer Vadilal’s Rajesh Gandhi, adding, “India’s bargaining power on the WTO has never been greater.” Indeed, with allies like China, Argentina, Brazil and Australia, India now packs considerable muscle. But, like other developing nations, India is unable to export its agricultural produce due to colossal western trade barriers. For instance, despite being the world’s largest milk producer, its milk exports are negligible. RS Sodhi of dairy giant Amul feels western governments are losing patience with their uncompetitive farmers. agricultural products manufacturers In the European Union, for example, with almost half the budget being pumped into agricultural subsidies, citizens and politicians alike are now recognising that supporting productive industries could fetch better returns. agricultural products exporters With its low-cost economy and the highest irrigated land-surface in the world, India is in a prime position to become a leading exporter of agricultural produce in an open world market, which also has major consequences for overall development. Indian agricultural products “The quality of life in Indian villages stands to improve drastically within the next three years if western barriers continue to fall as expected,” says Piruz Khambatta, chairman, Confederation of Indian Industry’s (CII) food-processing committee. “Agriculture has a lot of social ramifications. Half the population is made up of the poor living in villages, working as casual labour on the farms,” says Khambatta. With agricultural exports as core strength, Khambatta is confident that the “forgotten” part of India’s recent economic success will get a chance to compete. Sodhi too estimates an end to western subsidies to translate into a 20 per cent increase in the local milk producer’s income. “A fall in subsidies would create big opportunities at a rural level and a reduction in migration to urban centres like Ahmedabad.” Such opportunities would help India allay its growing urban-rural divide. Unfortunately Indian villages will have to wait a little while longer before their agricultural produce goes international.

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