Trade Pact is Likely to Hit State's Agriculture Sector

Published: 25th November 2014 06:01 AM  |   Last Updated: 25th November 2014 06:01 AM   |  A+A-

KOCHI: As discussions are under way for the Regional Comprehensive Economic Partnership (RCEP) free trade agreement with India and other 15 nations, the agriculture and plantation sectors in Kerala are staring at an uncertain future as they fear that once the pact is signed it will sound a death knell for these sectors.

As the 6th RCEP Trade Negotiation Committee (TNC) and related meetings are scheduled to be held from December 1 to 5 in New Delhi, the state is busy collecting the details on how the treaty will impact Kerala.

It is learnt that Kerala has written to the Prime Minister and Union Commerce Minister raising concerns of the state about RCEP and its impact on the agriculture sector in Kerala.

The RCEP is free trade agreement (FTA) between the ten member states of ASEAN-Brunei, Myanmar, Cambodia, Indonesia, Laos, Malaysia, the Philippines, Singapore, Thailand, Vietnam and the six states with which ASEAN has existing FTAs (Australia, China, India, Japan, Korea and New Zealand). The deliberations are likely to end by next year.

“The state government is taking stock of the situation and is in the process of assessing the possible impact of the agreement on Kerala. We will take all the necessary steps to safeguard the interests of the state. If the agreement proves to be against our interest, steps will be taken to protest against it,” Kerala Agriculture Minister K P Mohanan told Express.

As the agro-climatic conditions and crop mix in these countries are similar to that of Kerala, there will be a direct impact in rubber and spices and an indirect effect on the coconut sector. The price of these commodities is likely to fall steeply and there is a probability that Kerala spices get mixed with commodities from ASEAN nations, experts pointed out.

“Kerala will be one of the states worst-affected by the RCEP agreement due to the agro-climatic conditions as well as crop mix. There will be a direct impact on rubber and spices and and an indirect impact on coconut. For agri commodities China is a threat whereas in food processing sectors New Zealand and Korea pose a threat. Asia can be a real threat for plantation sector. In dairy sector New Zealand and Australia could be a major threat,” said Raju Narayana Swamy, Secretary to Kerala Government and Special Officer, WTO Cell.

According to the estimates of Kerala, there are over 13 lakh people associated with agriculture sector in the state. And around 75 lakh people are associated with the plantation sector. India is keen to be part of the RCEP despite China’s presence in the grouping as it is not part of either the Trans-Pacific Partnership or the Transatlantic Trade and Investment Partnership .

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