People's Democracy

(Weekly Organ of the Communist Party of India (Marxist)


No. 22

May 30, 2010


Oppose India-EU FTA: Kisan Sabha


IN a statement issued from New Delhi on May 23, the All India Kisan Sabha (AIKS) has noted that the Congress-led UPA government has gone ahead with secret negotiations with the European Union and is all set to conclude the India-EU Free Trade Agreement by October 2010. There are 56 other FTAs with various countries and regional groups in the pipeline. The government has gone ahead with the negotiations unmindful of the widespread objections and protests across the country against the recently concluded India-ASEAN FTA. The AIKS has condemned the UPA government for concluding such agreements that are bound to have far-reaching consequences for agriculture and other sectors without following federal principles and the time-tested norms of parliamentary democracy.


The first thing the AIKS statement, issued by its president S Ramachandran Pillai and general secretary K Varadha Rajan, noted is that the India-EU FTA envisages a lowering of Indian tariffs to zero or near zero levels for 90 per cent of the agricultural products, while the huge agricultural subsidies enjoyed by the farmers in EU countries remains unaltered. Agricultural exports from EU are in no way becoming prohibitive. The huge domestic subsidies to agriculture in the EU ensure that those countries can still continue to dump subsidised farm products in the Indian market. The World Bank-IMF-WTO economists claim that the export refunds have been reduced over time and that the EU is no longer subsidising agricultural exports. They, however, do not take into account the huge domestic subsidies for the exported agricultural products which more than compensate the reduction in export refunds.


According to an estimate in 2006 alone (the latest year for which the EU has notified the WTO of its domestic support in agriculture), cereal farmers in the 12 new member states of Eastern Europe (EU-12 countries) had received direct payments at the rate of 70 euros per hectare, which total to 16.006 billion euros. In 2006, the total cereal exports from the EU-27 countries was subsidised to the tune of 1.921 billion euros, of which export refunds were to the tune of 206 million euros, which is a mere 10.7 per cent of the total subsidy. A large chunk of 1.715 billion euros is derived from domestic support, which was 89.3 per cent of the total subsidy on exported cereals. The EU was subsidising its cereals exports by 61.3 per cent of the prevalent international market price. Indian farmers who are not having any such support cannot compete with the EU farmers and our markets will be swamped by cheap agricultural products dumped from EU. 


Noting that Indian farmers have been hit hard by the earlier FTAs and we have seen how the plantation sector, oilseeds sector and fisheries have been facing their adverse implications, the AIKS says the cheap imports of tea, coffee, spices, fish products and palm oil have led to drastic falls in their domestic production and to destruction of livelihoods. Farmers’ suicides have been high in regions growing some of these crops. The India-EU FTA is further expected to lead to the flooding of Indian markets with cheap dairy products. Dairy farmers dependent on milk and milk products for their income will be badly hit by this FTA.


On intellectual property, the AIKS statement said, the EU is demanding TRIPS Plus provisions and re-writing Indian patent and copyright laws. It is to be noted that the UPA government is also simultaneously drafting legislations compatible to such FTAs while keeping the parliament unaware about their linkages to such FTAs. The clause of data exclusivity for the agro-chemical industry in the proposed Pesticide Management Bill and the registration and re-registration clause in the proposed Seeds Bill is a case in point. Clearly pro-monopoly and pro-agri-business measures are being acceded to as demanded by the EU and the USA at the expense of the farmers and the poor.


Tariff barriers used by India to protect its industry and agriculture are being dismantled even as the EU uses non-tariff barriers such as engineering and phyto-sanitary standards and also heavy subsidies, particularly in agriculture. The focus of the ongoing negotiations is almost entirely on tariffs and creating TRIPS Plus provisions. It hence is completely tailor-made for opening the Indian market to EU and making it the dumping ground for their agricultural products even as India will not benefit in terms of gaining market access. 


The AIKS has, in view of all these facts, demanded that the UPA government must not go forward with the India-EU FTA without proper debate and discussion in parliament, with state governments and peasant organisations. It has urged upon the Indian peasantry and all sections of society to unite and fight against such attacks and force the Congress-led UPA government to withdraw from such free trade agreements that compromise the country’s interests.