Do you think that opening up the dairy market to the US will place India at an economic disadvantage and hurt small farmers, businesses in the sector? Comment (200 Words)
Refer - The Business Line
Enrich the answer from other sources, if the question demands.
IAS Parliament 4 years
KEY POINTS
· Opening up the dairy market to the US will place India at an economic disadvantage and hurt small farmers, businesses in the sector
· The dynamics of the dairy trade with focus on the US and India, the data shows that the US is a net exporter in dairy trading, with its share in global exports standing at 4.9 per cent as opposed to an import share of around 2.8 per cent in 2018.
Trade surplus
· The lower average final bound duties on dairy products in the US help provide a boost to diary exports from India. According to the World Tariff Profiles, 2019, an average final bound duty on dairy products in the US is around 19 per cent, as against close to 64 per cent in India.
· The third and most critical reason for India’s high trade surplus in dairy vis-à-vis US is attributable to ‘cultural and religious sentiments’. The latter implies that the Indian authorities’ mandatory certification from the concerned US agency which states that “the source animal should not have been fed animal-derived blood meal”, weeds out significant imports from the US.
Disadvantage, India
· Further, according to The World Dairy Situation,2019 report, milk yield per cow in the US is the highest in the world, standing at 10,500 kg per cow as against 1,715 kg per cow in India, which is the second-lowest in the world after Pakistan.
· Importantly, a dairy farmer in the US is able to sell milk at a price 16.6 per cent above the average world market price, as compared with the similar number standing at 15.6 per cent in India.
· Thus, it is evident from the numbers that despite lower milk yield and dominance of small and marginal farmers in dairy activity, India is comfortably placed to produce milk at a cheaper rate.
· The India-US trade deal in the dairy sector already been in force, India would have run up a dairy sector trade deficit of $85 million today, instead of the 2018-19 trade surplus of $14.71 million.
· This is not good news for the Indian dairy industry, as the trade deal will not only adversely affect the industry as a whole but also the socio-economic conditions of millions of small, landless and marginal farmers — especially women, who are active in this industry.
Tapasvi 4 years
Kindly review
IAS Parliament 4 years
Good attempt. Keep Writing.
