Thakur Abrar Gull
The Regional Comprehensive Economic Partnership (RCEP) is a proposed free trade agreement (FTA) between sixteen states which also includes India. The free trade agreement is scheduled to be signed in November, 2018 during the ASEAN Summit and the Related Summit in Singapore. The first summit of RCEP was held in November 2017 in Manila Philippines. RCEP includes China and India as important member states and is believed to be the world’s largest trading bloc; in total, it includes more than 3 billion people with a combined GDP of $17trillion, and accounts for 40% of world trade. RCEP will cover trade in goods, trade in services, investments, economic and technical cooperation, intellectual property and other issues.
RCEP is a Multilateral Free Trade Agreement which means these countries will be reducing tariffs on imports to its maximum. China, being the part of RCEP, has proposed zero import duty on apples and if this happens, the future of the domestic apple industry in Kashmir is in big danger. China’s proposal will directly impact apple trade of Jammu and Kashmir, Shimla and Uttarakhand. Apple is not only imported from China it is also imported from other countries like Australia and New Zealand which are members of this free trade pact. Zero import duty on apple means that the imported apples will be sold in the Indian market much cheaper than the local apples. Presently, the import duty on apples is 70% and you can imagine if this 70% tariff is brought down to zero, then what will happen to our domestic apple industry. The industry may suffer a catastrophic loss.
The total area under apple cultivation in Jammu and Kashmir is 1.45 lakh hectares and the production is 17-18 lakh MT approximately. Jammu and Kashmir is the largest apple producing state in India which produces 75% of total apples in India. 70% of the population is dependent on agriculture. In this case, if the import duty on apple is brought down to zero, a huge population of state will directly get affected.
The apple growers of state are already traumatized by the decrease in production and quality of the fruit from 2008 -09 onwards, though the area under apple cultivation is increasing. The reasons responsible for low quality and lesser production are believed to be substandard pesticides, chemicals and fertilizers. And, apart from this, the bad weather conditions in the months of March and April also had bad effect on apple production and quality. A few years ago, when production and quality suddenly decreased, growers, whose only source of income was from apple orchards, had no option but to take heavy loans from the JK Bank to meet their needs. Traders, who were doing the apple business, had also to resort to JK bank for heavy loans to survive. These growers and businessmen are still unable to pay off the debts owed to the Bank due to fluctuations in apple production and quality. Lower prices in the Mandis only made it more burdensome.
The manifesto of every candidate who fought election in 2014 had one thing in common, that is, they all promised a loan waiver for the farmers who had taken loans under KCC scheme. But, this claim remained confined to the manifesto copies only. In 2016, the government announced Rs 150 crore for waiver of 50% of KCC loans, but according to the government, this scheme was for most vulnerable farmers who had an outstanding of less than one lakh on March 31st, 2015. (On the one side, the government says the most vulnerable farmers would be covered, and on the other side, it is for those whose outstanding is less than one lakh rupees. I am confused how a farmer is categorized vulnerable if he has an outstanding of only less than one lakh rupees). The majority of the farmers under this scheme have taken a minimum of Rs 3 lakhs as a loan from JK Bank and the number of farmers who have taken Rs 1 lakh or less is comparatively very less in number. The government must take steps to help the growers who are unable to pay off their debts to JK Bank.
Apple production was higher in 2017 as compared to previous years and quality was also better, but this too has not helped farmers in any way because, this year the rate of Kashmiri apple came down drastically. The A Grade apple box, which was sold at Rs1000 in Azadpur fruit mandi, Delhi last year, was sold for Rs 600 to 700 this year. The fare taken by truck drivers per box this year was also higher which got increased to Rs 100 this season from Rs 70 last year. Similarly, the empty wooden apple boxes were sold at Rs 90 a box this season. The pesticides and fertilizers are also getting costlier with every passing season.
When farmers are already under the burden of debts and have lot of other problems and issues, the impact of the zero import duty can only worsen their conditions. I am the son of an apple grower and I know how we suffer. I talked to many growers and businessmen. They are worried and want government to take apple out of this trade agreement. A prominent apple trader told me that he was already doing a business of loss. So, government should not let this happen.. The people of Kashmir suffer in many ways, and agriculture is the only major source for many people here. Therefore, it becomes the responsibility of government to take this issue with the Central government and force them to take apple industry out of this agreement before RCEP becomes a reality.
—The author is a BA student at GDC, Shopian. He can be reached at: [email protected]