Agri Business

RCEP creates apprehensions among arecanut growers

AJ Vinayak Mangaluru | Updated on October 21, 2019

India produces around 7 lakh tonnes of arecanut every year. This output is sufficient to meet demand within the country   -  Raviprasad Kamila

Co-ops to seek commodity’s exclusion from agreement

Stakeholders from the arecanut sector are now gearing up to bring pressure on the government to keep arecanut away from the proposed Regional Comprehensive Economic Partnership (RCEP) free trade agreement. Indian arecanut growers, who are facing problems with the import of arecanut from Indonesia and Thailand, feel that the inclusion of arecanut in the list of commodities for free trade under RCEP will further affect them.

Subrahmanya Bhat, a grower from Bantwal taluk of Dakshina Kannada district, told BusinessLine that around 7 lakh tonnes of arecanut is produced in the country. This production is sufficient to meet demand within the country. Referring to the impact of arecanut from countries such as Indonesia and Thailand over the past few years, he said any decision to include arecanut under the proposed FTA may prove harmful for the growers in the country. Explaining this, he said the cost of production is cheap in countries such as Indonesia and Thailand, and inclusion of arecanut in the agreement will provide price stability for the crop in these countries. This may encourage them to further expand their area of cultivation. The proposed FTA may allow these countries to market their increased production in the Indian market. Ultimately it will affect the growers in India, he said.

‘No big impact likely’

However, Vigneshwara Varmudy, an agro-economist who has published several research papers on the arecanut market, felt that the proposed FTA may not have a big impact on the commodity market. The growing community had expressed similar apprehensions when the country signed SAFTA and ASEAN also.

Stating that import could happen from Indonesia and Thailand, he said it is being imported from those nations through Myanmar even now. Official data show that the country imports around 3,000 tonnes a year. Unofficial figures put the imports at 50,000 tonnes. That import may continue, he said.

“What I feel is that RCEP may not have a big impact on the arecanut market as such. Since the farmers are getting half-baked information on RCEP’s impact on arecanut, there is apprehension among them,” Varmudy said. Agreeing with his statement, Ravish Hegde, General Manager of the Sirsi-based Totagars’ Cooperative Sale Society (TSS), said that arecanut is currently being imported illegally from Indonesia and Thailand. The proposed agreement may not have any further impact, he said.

SR Satishchandra, President of Campco (Central Arecanut and Cocoa Marketing and Processing Cooperative) Ltd, said the cooperative is studying the implications of RCEP on arecanut. Initial studies indicate it may have a impact. “We will write to the Commerce Ministry and the State governments to remove it from the list,” he said.

Published on October 21, 2019

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