Prime Minister Narendra Modi  (Photo: Reuters)
Prime Minister Narendra Modi (Photo: Reuters)

As India says no to RCEP, dairy farmers heave a sigh of relief

  • Several women dairy farmers, who supply milk to Hatsun Agro, had written to Prime Minister Narendra Modi last week, concerned over the outcome of the RCEP trade deal
  • The dairy sector is one of the few success stories in India's recent agriculture history

With India deciding against joining the Regional Comprehensive Economic Partnership (RCEP), a China-backed free trade agreement (FTA) among 15 nations, dairy farmers are a relieved lot.

"It is not that the (dairy) industry alone would be affected, it will be affecting basic agriculture," said RG Chandramogan, chairman and managing director, Hatsun Agro Product Ltd, India's largest private dairy company which also has products such as IBACO and Arun Ice Creams.

Several women dairy farmers, who supply milk to Hatsun Agro, had written to Prime Minister Narendra Modi last week, concerned over the outcome of the RCEP trade deal.

"The dairy industry is the ATM card for the villagers," said Chandramogan.

The dairy sector is one of the few success stories in India's recent agriculture history. The country's milk output has so far more than doubled from 79.66 million tonnes in 2000, making it the world's largest producer and consumer of milk.

As the deal offered zero-duty imports of cheaper dairy products, the sector was concerned about heavy competition in both price and technology from global behemoths like Fonterra Co-operative Group Limited, the world's largest dairy exporter and the most valuable company in New Zealand.

Indian farmers are paid an estimated 60% of milk prices whereas it is only 23% and 24% in New Zealand and Australia respectively, as per experts.

Milk producers of India are thankful to Modi for addressing the concern of dairy farmers, said RS Sodhi, Managing Director of Gujarat Cooperative Milk Marketing Federation, better known as Amul, India's largest milk cooperative.

"We were assured that the interests of dairy farmers will be protected. So we are happy that the imports of New Zealand or Australia will not be allowed. In the current form …it (RCEP) would have been disastrous for farmers in India," Sodhi said.

"We had met (commerce minister) Piyush Goyal on 30th October… they appreciated and immediately agreed not to take a decision against the interest of the farmers," he added.

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