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Fears of large-scale agri imports allayed

Our Bureau

NEW DELHI, Feb. 23

THE Economic Survey 2000-01 has sought to allay fears of large-scale imports of agricultural products taking place on account of import liberalisation in line with the commitments to the World Trade Organisation (WTO).

``Agri-imports constitute only a small proportion of the country's total imports. During the period 1996-97 to 1999-2000, agri-imports have been in the range of four to seven per cent of the total imports of the country,'' the Survey has pointed out.

It has further noted that the entire portfolio of agricultural imports was dominated by two commodities -- edible oils and raw cashewnut (which is used for further processing for exports of kernels).

Thus, in 1999-2000, edible oils accounted for over 70 per cent of total agri-imports, with raw cashewnut making up another 10 per cent (incidentally, the Survey has failed to mention that sugar happened to be the second largest imported commodity in valu e terms last year).

``Each of the other agricultural and allied products imported into the country -- cereals, pulses, spices, sugar, milk and milk products, chicken meat, etc -- account for a very small proportion of total agri-imports,'' the Survey has stated.

Further, these imports have taken place only in some ``climatically abnormal years warranting relatively larger imports'', as in the case of cereals (mostly wheat) in 1997-98, pulses in 1996-97 and 1997-98.

The Survey has said that the Government's import policy has been to keep tariffs low only for those ``sensitive, essential products, where there is a large domestic shortfall in production''. Pulses were a typical example where import duty was fixed at n il.

Indeed, in what could be a significant pre-Budget message hinting at limits towards further tariff increases, the Survey has said that ``edible oil prices may be under pressure later in summer and would need to be carefully watched''.

But for all other commodities, ``tariff walls were raised this year...to ally (sic.) the fears of large-scale dumping of such products in the Indian market in view of liberalisation of import policy''.

The Survey observed that the current import duty (basic plus surcharge) amounted to 50 per cent for wheat, millets and apples, 80 per cent for rice in husk (paddy), 70 per cent for polished rice, 35 per cent for peas and quinces, 25 per cent for other fr uits, 100 per cent for arecanuts, 40 per cent for shelled cashewnuts, 58.5 per cent for spices, 60 per cent for sugar (excluding countervailing duty of Rs 850 per tonne), 100 per cent for chicken meat, 71.6 per cent for RBD palmolein, 50.8 per cent for o ther refined oils, 45 per cent for crude coconut oil, 55 per cent for crude palm oil (for uses other than vanaspati-making) and 35 per cent for other crude vegetable oils.

Regarding agri-exports, the Survey's data has indicated a steady decline in the total value from $6,828 million in 1996-97 to $6,594 million in 1997-98, $6,014 million in 1998-99 and $5,475 million in 1999-2000.

The contribution of agri-exports to the country's total exports has also correspondingly fallen from 20.4 per cent to 18.8 per cent, 18.1 per cent and 14.6 per cent.

The fall has been especially precipitous for oilmeals (from $985 million in 1996-97 to $370 million in 1999-2000) and cereals (from $1,104 million to $718 million), coffee (from $402 million to $315 million) and meat products (from $200 million to $180 m illion).

The only products to show any uptrend have been cashew (from $362 million to $566 million), tea (from $292 million to $407 million), spices (from $339 million to $393 million), processed fruits and juices (from $59 million to $113 million) and marine pro ducts (from $1,129 million to $1,180 million).

``India's agri-exports face certain constraints that arise from conflicting domestic policies relating to production, storage, distribution, food security, pricing concerns, etc.

``Unwillingness to decide on basic minimum quantities for exports makes Indian supply sources unreliable,'' the Survey had pointed out. Also, higher domestic prices in comparison to international prices in bulk commodities such as sugar, wheat and rice ` `makes our exports commercially less competitive'', it has added.