RCEP deal would hurt dairy sector heavily, cautions SJM

India should resist the pressure from Australia and New Zealand to include dairy sector in Regional Comprehensive Economic Partnership (RCEP) pact because import of cheaper milk and milk products would adversely hit the livelihood of 50 million milk producers in the country, Sangh Parivar-affiliated Swadesh Jagran Manch (SJM) said on Wednesday.

"This will prove to be the most suicidal step by the government of India since independence," the organisation said in a statement.

The government is contemplating to finalise RCEP, a trade block which includes China, Australia and New Zealand, apart from 10 ASEAN countries, Japan and South Korea. New Zealand and Australia are negotiating very hard with India to reduce duty on dairy products so that they can get an access to India, which is the world's largest market of dairy products, SJM said.

SJM further said that the signing of RCEP would mean death knell of dairy sector in India, because it would lead to reduction in procurement price of milk from farmers due to cheap imported milk powder from New Zealand. Today, farmer gets nearly Rs 28-30 per litre of milk, from milk processors, from cooperative and even other private players. This procurement price would come down drastically, if imports are allowed through RCEP.

Besides, this may result in approximately 50 million rural people losing their jobs as they will be forced to quit the unremunerative dairying. This may, in turn, push India to depend ever upon imports for dairy products like in case of edible oils and thus threaten India's food security, SJM said.

"It’s unfortunate that officials of Centre of Regional Trade, an autonomous body under Ministry of Commerce have been supporting the offer to reduce tariffs on milk and its products, by twisting the data of India’s milk production and projecting a huge shortage of milk in India in coming 10 years," it said.

They are also projecting shortages of fodder, roughage and water for animal rearing and showing unrealistic export opportunity within RCEP countries despite huge non tariff barriers and low price of New Zealand dairy products. Milk producers and processors have been pleading with the Commerce Ministry, presenting some hard facts, which are deliberately ignored by bureaucrats and consultants who are pushing the deal.

According to a report brought out by Niti Aayog in Feb 2018, the demand for milk will be 292 million tonnes (mt), against which India will produce 330 mt milk by 2033. Thus, India will be surplus in milk products and the question of imports does not arise. National Dairy Development Board and even international organisations like FAO and IFCN have projected a similar trend.

The same NITI Aayog report further suggests very good agricultural production, which will ensure availability of roughage and fodder for milch cattle even in 2033.

SJM also reminded Prime Minister Narendra Modi about his promise of doubling farmers' income by 2022 and said the step would actually halve dairy farmers’ income as they will be forced to leave dairy farming.