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Monday, December 31, 2012

Letter to Supreme court appealing to stop GMO field trails

South Indian Coordination Committee of Farmers Movements
636, Ideal Homes Township, Raja Rajeswari Nagar, Bangalore -5600098. Karnataka.
Telephone +91 94444089543 Email:

Nov 4, 2012

To Whom It May Concern:
Supreme Court of India
In the case of Aruna Rodrigues Vs. Union of India
(Writ Petition (Civil) No. 260 of 2005)

Sub: Requesting the Hon’ble Supreme Court to accept the court-appointed TEC’s
interim report recommendations and order for stopping of all field trials until
conditions met

The South Indian Coordination Committee of Farmers’ Movements(SICCFM) is an alliance of various
farmers movements from the states of Tamil Nadu, Kerala and Karnataka. The members are
Karnataka Rajya Raitha Sangha, Tamila Vivasaigal Sangham, Adivai Gothra Mahasabha
Kerela, Kerela Coconut Farmers Association and many others representing thousands of
Two recent reports – one, of the Technical Expert Committee set up by this Hon’ble Court
with five experts from both the petitioners’ and respondents’ side unanimously signing off on
an interim report for the court, and another, of the Parliamentary Standing Committee on
Agriculture which had parliamentarians cutting across all parties unanimously putting out
their report - have reiterated some main points asking for need assessment and assessment
of alternatives before proceeding with open air trials as laid down also by the Task Force on
Agricultural Biotechnology headed by Dr M S Swaminathan in 2004.
The state of the regulatory regime – its design as well as its functioning – have come under
severe criticism again and again in various inquiries including the public debate around Bt
brinjal on which the Government of India announced a moratorium in February 2010. We
would like to point out that what these various reports and inquiries are pointing out is
nothing new, and improvements are also not being witnessed in the state of affairs.
The learned Bench looking into this matter might be aware that there have been several
instances when field trials took place in violation of the existing statutory Rules and of laid
down biosafety norms. The regulators have been approving open air trials without any
capabilities for monitoring. Lack of monitoring is apparent with Bt cotton after its release too.
It is apparent from various civil society investigations, from the very way in which Bt cotton
spread in India illegally and from contamination incidents elsewhere that field trials which are
deliberate releases of untested and new organisms, pose a grave threat. One such incident
came to light in a Monsanto GM maize trial plot in Karnataka and the regulators undertook
an investigation a full year later, showing the lack of acting even on complaints! Further,
there is no liability regime in place to take care of things when they go wrong during such
field trials. It is also well known, and being pointed out by many farmers’ rights advocates
that no contamination testing has ever taken place in our country after field trials. Going by
contamination incidents elsewhere, even small contamination incidents threaten trade
security for our farmers. There has been a recent EU alert on basmati rice consignments’
contamination, as the learned Bench would be aware.
The petitioners of this PIL were therefore absolutely correct in asking for a moratorium on all
open air releases of GMOs. We write to you to kindly accept
in toto the recommendations of
the Committee that this Hon’ble Court itself had set up and ensure that unneeded GM crops
like Bt crops are not allowed into the country including for field trials and that we do not
willfully jeopardize our valuable diversity in germplasm of several crops for which we are the
Center of Origin and/or Diversity by allowing transgenic versions of those crops. WE should
bear in mind that China had prudently not opted for GM soybean, given that soy diversity is
the wealth of that country.
During the Bt brinjal public debate in the country, it became apparent that our biosafety
assessment is faulty. When international scientists started analyzing the biosafety dossiers
presented to the regulators by the company involved, that too after this Hon’ble Court
ordered for such biosafety data be put out for public scientific scrutiny, it became apparent
that our testing regime is inadequate and lacks independent testing in addition to long term
testing. Further, safety interpretation was being wrongly made from data that was obviously
pointing to health and other problems. All of this was publicly acknowledged when the
moratorium was announced by the government. Nothing has changed subsequently in terms
of improvements being brought about. The TEC is absolutely correct in asking for a reexamination
of all biosafety data for approved as well as in-the-pipeline crops.
We believe that transgenics will affect our diversity and that this is an unneeded, hazardous
technology. We welcome the interim report of the TEC of the Supreme Court. We believe
that given that the Government of India also got to nominate its experts into the TEC, they
should abide by the TEC’s recommendations. We urge the Hon’ble Court to immediately
pass all appropriate orders based on the recommendations of the TEC.

Chukki Nanjundaswamy
Working President, Karnataka Rajya Raitha Sangha(KRRS), Karnataka
Convener, South Indian Coordination Committee of Farmers’ Movements


South Indian Coordination Committee of Farmers Movements (SICCFM)
636, Ideal Homes Township, Raja Rajeswari Nagar, Bangalore -5600098. Karnataka. Telephone +91 94444089543 Email:
‘Land Acquisition Bill and FDI in Retail not acceptable’: South Indian Farmers’ Leaders New Delhi, October 5th 2012: South Indian farmer’s movements, under the banner of South Indian Coordination Committee of Farmers’ Movements (SICCFM) have come all the way to Delhi to criticize the anti-people approach of the LARR bill as well as the undemocratic approval of FDI in retail by the UPA. "The UPA government is proving itself to be a dangerous anti-people and corrupt government. After shocking the country with the largest corruption scams in India's history, they are trying to grab our farm land to give to corporations for private profit. Land is not a commodity, it is our identity and we need it for our livelihood and to feed the nation. We farmers have an inalienable right to land. The bill should be focused on people’s real development and not for profiteering by a few," said Chamarasa Patil, the president of Karnataka Rajya Raitha Sangha (KRRS).
SICCFM is criticizing the LARR bill, now called ‘The Right to Fair Compensation, Resettlement, Rehabilitation and Transparency in Land Acquisition’ Bill 2012 because it has not addressed fundamental questions about lands' critical role in food security, rural regeneration and livelihood security of millions. Furthermore the government’s total disregard to the parliamentary standing committee recommendations is disgraceful. The standing committee had clearly reflected the major concerns of the people in its report. When the industry did not like it, the GOI went ahead and diluted the bill and handed it over to a group of ministers.
The fundamental principle of the bill is flawed. It is mainly focused on urbanization, industrialization and ‘infrastructure development’ rather than food and livelihood security of the masses. By using the language of fair compensation they are overshadowing the real purpose of the bill which is to divert people’s land to private industries. "The wording of the bill is such that "infrastructure development" in the name of "public purpose" can mean anything notified by the government. For example, it can include projects like golf courses, elite residential housing, expensive private hospitals. In which way are these going to help the poor who are giving up their most vital resource? This type of so called development is for elite consumerism and not for the masses of India. Our local gram panchayats should decide whether a project is for real public purpose or not" said Nandini Jairam, women’s leader of KRRS. SICCFM has been asking for a national debate on what constitutes ‘public purpose’ in the law. Any land acquisition by the state for any private entity, including under PPP projects is unacceptable and does not constitute public purpose. Already lakhs of hectares of farmland have been converted to non-agricultural uses, and this is a dangerous trend. We need to conserve farmland for future generations.
Furthermore, the government has already acquired thousands of hectares that are lying idle all over the country. "The government needs to first bring out a white paper to show what is the status of past land acquisitions and farm land conversion to industry before blindly making laws to hand over land to industry. We also need a full, real picture of compensation and R&R related to past land acquisitions. Lakhs of people have not still received compensation or R&R or promised jobs. Until all these issues are resolved, we demand that all land acquisition should be suspended immediately," said KS Puttanaiah of Karnataka Rajya Raitha Sangha (KRRS).
South Indian Coordination Committee of Farmers Movements (SICCFM) 636, Ideal Homes Township, Raja Rajeswari Nagar, Bangalore -5600098. Karnataka. Telephone +91 94444089543 Email: Speaking on the issue of FDI in multi-brand retail, Nagendra of KRRS said, "The Government has already not kept the promises it had made when 100% FDI in single brand retail was allowed. Then they had said that there will be 30% mandatory procurement from small/village/cottage industry. Now they are conveniently saying that procurement from village industry should be just ‘preferable’, ‘where feasible’. Similarly any protection mechanisms for farmers will become diluted in the case of FDI in multibrand retail also."
Analysis from elsewhere clearly shows that big retail chains like WalMart and Carrefour operate through market concentration and monopolies. In the US, small or medium farmers cannot sell their produce to a grocery store because the chain stores have central procurement only from farms of thousands of acres. Big retail chains also practice many unfair practices such as maintaining exclusive supply list of farmers or removing them from the list at their whim. Whereas the Indian retail business today has no such domination by powerful players.
Big retail will not create much employment either. Indian retail sector employs 40 million people and is estimated at 400$ billion while Wal-Mart, with a similar turnover of $420 billion, employs only 2.1 million people. It is the Indian retail sector which is a much bigger employer. Evidence shows that farmers’ incomes would suffer too. Out of the food dollar, farmers in the US now receive only 4% while in 1950 it was 70%. Also big retail does not buy, or pay over the counter at current prices. They buy the nation’s next harvest in futures market and fix farm prices. They also import cheap goods, pulling prices down and destroying local production like they have done in the US.
"The real aim of Wal-mart and other retail giants is to control most of the supply chain, so that it will wipe out whatever little power the farmers have now. This is what the MNCs and US want and this is what the Indian government is delivering. If the government is really serious about helping farmers, they need to strengthen farmers' bargaining capacity in the marketplace," said Chukki Nanjundaswamy of KRRS.
"In a nutshell, there is nothing of benefit to the majority of the farmers of this country and we demand that the government retract this notification immediately", said Kannaiyan Subramaniam, Coordinator of SICCFM.
SICCFM shared a detailed note on both FDI and LARR bill and called upon all Parliamentarians to engage with the issue in greater detail and uphold the interests of farming communities across the country.
For more information, contact: Kannaiyan Subramaniam: 09444989543; Email:

Thursday, September 13, 2012

South Indian Coordination Committee of Farmers Movements
636, Ideal Homes Township,
Raja Rajeswari Nagar, Bangalore -5600098. Karnataka.
Telephone +91 94444089543

13th September, 2012.
Land is Life.
South Indian farmer’s response to the Land acquisition bill( LARR bill 2012)
At this point, people’s movements of SICCFM are not willing to enter into discussions on the details of compensation and rehabilitation packages because we do not agree with the fundamental premise of this bill.  This bill seeks to handover our farmlands to private corporations in the name of “public purpose”. The wording of this bill is so deceptive that almost anything could be construed as a public good and it falsely seems like farmers have become partners in India's corporate development.

But as farmers and poor rural people we ask - what purpose will be served to our communities and our development by a private hospital or university which we cannot afford, a luxury hotel, a golf course or a formula one race track, a multi-lane highway where a company will collect toll tax for 36 years while we have no roads in our villages, or a mine that kills our forests and destroys our health? Most importantly, we ourselves have the right and ability to decide what is good for our development and demand that our own local institutions – gram sabhas give their full consent and decide whether a project constitutes our development and public purpose. We cannot accept some random figure of 80% consent or “consultation” as an excuse for democracy.

Just because corporations are complaining about higher costs to their projects does not in anyway mean that the bill is automatically good for the farmers. In fact the cost of such a bill will be even steeper for India's rural communities and our nation’s ability to feed itself.  At this time our nation is reeling under coalgate scam, 2G spectrum scam, paid media scam and under no circumstances can we be fooled once again to let the government act as our trustee or custodian because history and facts have proven otherwise.

Moreover the government has already acquired thousands of acres of lands that are lying idle all across the country. The government has all kinds of land banks everywhere. These lands were taken from farmers previously and now have not been used or illegally converted to some other use. In many cases farmers are yet to see any compensation. Rehabilitation has not been received by millions of Indians displaced by corporate development. Why then are we making a law to carry out further acquisitions? What about using the land already taken and fulfilling people’s dues from the past first?

Lastly, what is the use of such a bill when it is planning to exempt 13 out of 16 laws that acquire lands such as SEZ act and mining act? This trend of farm land grabbing and diversion of water to industry is legally ongoing all over the country. This is having a direct bearing on our ability to produce food. In the case of just one project, the Yamuna expressway alone we will lose the ability to produce 100,000 tonnes of food grain a year.  Thousands of acres are earmarked to be acquired in all the fertile food producing states of India.  When 50% of our children are malnutritioned and our hunger levels are worse than the poorest countries of Sub Saharan Africa, our government should be acquiring land for food security and not rampant industrialization.

Given this situation we do not agree to give our lands unless it is for real public purpose decided by us. Here are our current demands:-

1.     Suspend all ongoing land acquisitions
2.     Bring out a white paper of all the past land acquisitions nationally and what is being done with that land
3.     We demand a national level debate on “public purpose”
4.     A complete ban on acquisition for private corporations

These demands were formed on 9th Sep in Bangalore where SICCFM has held an open discussion on the Land Acquisition and Rehabilitation & Resettlement bill (LA&RR bill) along with many farmers’ organizations and allies.

Signed by:

Karnataka Rajya Ryota Sangh( KRRS) (Karanataka).
Thamizhaga Vivasayigal Sangam( Tamil Nadu),
Uzhavar Ulaippalar Katchi(Tamil Nadu),
Uzhavar Periyakkam(Tamil Nadu),
Katchi Sarpartra Thamizhaga Vivasayigal Sangam(Tamil Nadu),
Kongunadu Vivasayigal Sangam( Tamil Nadu),
Kerala Coconut Farmers Association (KCFA)( Kerala)
Adivasi Gothra Maha Sabha(Kerala),

For further details

Monday, September 10, 2012

Indian Coordination Committee of Farmers’ Movement
                                    Road No. 2, A – 33, Mahipalpur Extension, New Delhi – 110 037, India                               
Tel: 011 - 26783000, 26784000; Fax: 011-26785001; Email:
Farmers Movements on the Land Acquisition, Resettlement and Rehabilitation Bill (LARR) 2012

The MoRD may have accepted some suggestions from the people and the Parliamentary Standing Committee (PSC) report which we support and contributed to, but we are still fundamentally opposed to the spirit of the LARR bill in its current form. It is using the language of transparency and compensation to allow the government to take people's land in the name of public purpose and then hand it over to private industries. We understand that the PM has referred the LARR bill to a Group of Ministers after opposition from key ministers who want to push for land acquisition for private parties. Also media sources have revealed  the MoRDs intention to make the bill "more investor-friendly". It is shameful that the government is trying to appease the industry and permanently establish itself as the land broker for corporate players. What is needed today is a land law that is pro peoples development, improves food security and prevents climate change.

We cannot accept the falsity that corporate profit is good for the masses of India. Corporate profit is not public purpose. Projects that are geared towards elite consumerism – even if PPP ventures are not “public purpose”. Steel plants, formula one race tracks and elite housing complexes are not public purpose but highly profitable ventures. Multi lane highways are not benefiting us- why are no roads being built in the villages instead?  We stress that local government – gram sabhas and basti sabhas should give full consent to decide if a certain project is public purpose or not- merely consulting them is not enough.

As farmers we ask- who will feed the nation?  Are we planning to kill our farmers or turn them into unemployed or laborers and then import food from corporations abroad? Is it sensible for our country to set up policies that will undercut our own ability to feed ourselves? Why are we still a nation with the most shameful hunger and farmer suicide statistics? It makes no rational sense to allow government acquisition of any kind of agricultural land for industrial purposes. Millions of acres of agricultural land are also acquired and converted to industrial purposes under up to 13 other acts that are exempt from the provisions of LARR. Such type of land acquisition is a threat to our national food security. All such acts such as SEZ's, mining, railways and others should be brought under this one act. It is pitiful that the government is showing such desperation to industrialize and not the same urgency to feed our people and stop farmer suicides. We strongly demand implementation of the recommendation of the parliamentary standing committee to not acquire any type of agricultural land (single or multi cropped).

Although proper compensation is a very important issue for us, so is proper rehabilitation. Waving money at farmers and then destroying their livelihoods is not acceptable. Proper rehabilitation which means an alternate sustainable livelihood and land for land must be provided. This too must be monitored and implemented by the gram and basti panchayat.  Also those who have already suffered due to previous displacements and not yet received rehabilitation must  receive it. The new law should apply to them all. We also demand that all ongoing acquisitions be stopped unless and until the new law that reflects peoples true development needs comes into being.

We cannot accept the violent method in which governments have responded to our genuine protests. We condemn the recent arrests of hundreds of farmers by the MP government in Anantapur who were legitimately trying to protect their livelihoods and lands. Instead of entering into serious dialogues the government just lathi charged and jailed us.

We would like to state that we are not against industrialization as many have tried to portray us as backward and anti development. We are not against a development or industrialization which will provide sustainable livelihoods to our people, which will give us education, health and food in our communities or roads in our villages. But we are definitely against such a development model which prescribes rampant industrialization without considering the well being of the masses and in fact causes inequality, dispossession and climate change. We cannot discuss any land law without discussing its impact on overall development – they both go hand in hand.

We will be organizing a meet of many farmers organizations in Bangalore on 9 September to further analyze this act and discuss our future course of action.

Our demands:
  • We demand a national debate on public purpose.
  • We support a new legislation to replace the colonial land acquisition act. But, we cannot accept a bill which will be an effective tool to grab farmers land for private profit and urbanization. We demand a ban on acquisition for private projects.

Signed by:
Bhartiya Kisan Union
Vijay Jawandhia, Shetkari Sangh, Maharashtra
Karnataka Rajya Raitha Sangha (KRRS) ,
Kerala Coconut Farmers Association( KCFA), Kerela
Tamil Nadu Farmers Association, Tamil Nadu
South Indian Coordination Committee of Farmers Movements (SICCFM)

For more information please contact:- S Kannaiyan, SICCFM: +91 9444989543 
 Dharmendra, BKU: +91 9219691168 ( ;

Saturday, January 28, 2012

Trade Liberalisation's Impact on Edible Oil Sector in India

Paper submitted in the 
Public meeting by KRRS, Chamrajanagar, Karnataka, 6th July 2011
Afsar Jafri[1]
Focus on the Global South, India
New Delhi
The oil seeds sector in India has seen the most adverse impact of last 20 years of trade liberalization in the country. The oil seeds sector in India has undergone perceptible changes in the new environment of liberalized trade. This period has witnessed the great transformation of the edible oil industry, from self sufficiency to import dependency; from small entrepreneur based economy to a monopolistic control of multinationals; and from ‘loose sold oil’ to ‘branded/packaged oil’. This period also witnessed changing consumption pattern, as consumers began to accept edible oils (like palm oil) other than those consumed traditionally. The edible oil sector today presents a typical example where the multinational monopolies over all types of edible oil are fast going into the control of few big corporations of the west like Cargill, ConAgra and Bunge. This vindicated our apprehensions that the trade liberalization regime as advocated by free trade paradigm under World Trade Organisation (WTO) and Free Trade Agreements (FTAs) generally protects and advances the interests of large multinational corporations.

India is one of the four major players in the edible oil sector in the world next to USA, China and Brazil, as oilseed grower, oil producer, importer and exporter, accounting for about 14.5% of the world’s oilseeds area and 6.65% of the production. Currently, India accounts for 6.8% of the oil meal production, 5.9% of the oil meal export, 6.1% of the vegetable oil export, 9.00% of the edible vegetable oil import and 9.3 per cent of the edible oil consumption of the world.

India is the home of oilseeds diversity, growing different varieties of Castor, Coconut, Groundnut, Linseed, Niger, Rapeseeds and Mustard, Safflower, Sunflower and Sesame. These nine oilseeds are being cultivated mostly under rain fed conditions and support the livelihood earnings of small and marginal farmers of the arid and semi-arid ecosystems of the country. These oilseed crops form the second largest agricultural commodity after cereals occupying 14.87% of the gross cropped area, which is around 27.86 million ha and provides 27.98 million tonnes of production registering productivity level of 1004 kg/ha. It is estimated that 14 million farmers are involved in oilseed cultivation, while one million persons are involved in processing of oilseeds and oils.

The edible oil sector has faced several challenges due to trade liberalization with the formation of WTO in 1995. Now this sector is again at the verge of another onslaught due to proliferation of the free trade agreements (FTAs) which India has signed with economic powerful nations/group of nations like the Association of Southeast Asian Nations (ASEAN), South Korea and Japan. Besides that more than 12 FTAs are under negotiation including with European Union (comprising of 27 European countries), Australia, New Zealand and Israel. The Indian edible oil sector is going to be largely affected by India’s FTA with the ten nations ASEAN bloc, which was signed in August 2009, and came into force on 1st January 2010. Any further liberalisation in trading of cash crops under ASEAN-India FTA will expose small and marginal farmers in the plantation sector mainly in four Southern Indian states to the competition which will lead massive job loss in these states.

Trade Liberalization: A recipe for import dependence
India has a bitter experience of trade liberalization in edible oil which has resulted in an increasing gap between demand and production of edible oil in India. In 1980’s when the demand and production gap widened and in 1988 India faced a shortfall of 2 million tonnes (MT), necessitating an import of 1.9 million tonnes, of worth USD $1billion. Due to the increasing burden on the country’s depleting foreign exchange reserves for edible oil imports, the government of India undertook combination of steps to augment production including setting up of Technology Mission on Oilseeds (TMO) in 1986 to make oilseeds more attractive to growers. This led to an enhanced oilseeds production and thus, self sufficiency in edible oils. The production of oilseeds increased by over 70% in six years and the country became almost self-sufficient in edible oil (up to 98%) and the imports of edible oil was reduced to 0.1 million tonnes (MT) in1992-93 from 1.5 MT in 1986-87. However this self sufficiency in edible oil production was short lived. Under the pressure from the World Bank Structural Adjustment Programme (SAP) India started the process of phased liberalisation of edible oil imports from 1994-95. And this was at a time when edible oil exporting countries like Malaysia, Indonesia, Argentina and Brazil were preparing to flood the Indian market with Palmolein and genetically engineered soybean oil. The series of measures for trade liberalization in edible oil completely reversed the situation within a decade and from self sufficient position, India became a net edible oil importing country. These trade measures were:
  • Elimination of state monopoly on edible oil imports in 1994 by placing palmolein oil imports under the Open General License (OGL), subject to 65% of basic customs duty (or import duty). Subsequently, imports of other edible oils were also placed under OGL.
  • Rapid lowering of import duties, from 65% in 1994 to 20% in 1996 and 15% in 1998 even though the Bound Duty under WTO for all types of crude and refined edible oil is 300% except soybean oil which is fixed as 45%.
·         Removal of Quantitative Restriction (QR) and replacing them with import duties, purportedly under WTO obligations for market access but actually through un democratic and non-transparent bilateral negotiation between Susan Esserman of the Commerce Department, United States of America and N.N. Khanna of the Ministry of Commerce, Govt. of India where it was agreed to eliminate 1429 items from quantitative restrictions between 1st April 2000 to 1st April 2001.

The negative consequences of liberalising the edible oil policy soon became clearly visible. These measures combined with a sharp fall in international edible oil prices in 1999 led to the dumping of cheap edible oil, mainly soybean and palmolein oil, in India initially in far greater quantity than the requirement and as a result the imports of edible oil rose from 0.1 million tonnes in 1992-93 to 4.3 million tonnes in 2002-03. Thus the self sufficiency level of edible oil also got reduced in ten years, from 98% in 1994-95 to about 53% in 2002-03. On the other hand the share of bills for the import of edible oil in the total agricultural imports has ranged from 6% to 52% during 1991-92 to 2002-03. India has been exporting the oil meals, however, their export also got declined from as high as 4.84 MT in 1993-94 to 1.61 MT in 2002-03. The flood of cheap imported oil had disastrous effect on India's edible oil farmers due to drastic slump in oilseeds prices. In 1999, newspapers reported massive distress sales of oilseeds by farmers at prices much below the Minimum Support Price, with the government refraining from market intervention operations. Not getting a remunerative price, farmers responded in the only way they could - by reducing the acreage under oilseeds. After seeing a continuous increase in acreage up from 18 million hectares in 1986 to 27 million hectares in 1994, the area under oilseeds production has remained around 26-27 million hectares, falling at times of depressed international prices. Moreover, the edible oil policy of the post-WTO period introduced a large element of instability into domestic production by completely exposing it to international price fluctuations.

Impact on the Coconut Economy
With the inclusion of coconut oil in the Open General License (OGL) list and the reduction of import tariffs on edible oil in the 90’s, the prices of coconut had fallen sharply. The average price of coconut oil came down from Rs. 5553 a quintal in 1996-97 to Rs.2500 a quintal in September 2000. Between 2000 and 2005, the prices for coconut oil crossed Rs. 6000 but again it dropped from Rs 6758 per quintal in 2004-05 to Rs 5078 quintal in 2005-06 and by March 2007, it reduced to Rs 4800 a quintal. Even the tender coconut prices crashed from Rs. 10 a  piece to in mid 90’s to Rs 2-3 a piece in the year 2000 which was a big worry for the coconut farmers whose daily income in cash got drastically reduced. The price of the Coconut has been going down year by year, e.g. in 1988-89 the prices were Rs 450 per hundred units (Rs. 4.5 for each coconut piece), in 1997-98 it went up a little but to Rs 650, but in 2007-2008 it came down to Rs 450 and in 2009-2010 it was as low as Rs 275 per hundred units. The coconut prices are diminishing when the inflation is going up. The actual rate for the Coconut should have been at least more than Rs 15/- per unit now.

However one of the main reasons for decline in the coconut prices since 90’s were the constant lowering of import duty (tariff) on crude and refined palmolein oil; from 1994 till 2005 there were eleven changes in the tariff rate for palmolein oil which naturally affected the price stability of the Coconut and its products. And the major jolt came in April 2008 when the import duty on all crude edible oils duty was reduced to zero, and on refined edible oils duty was reduced to 7.5% on the pretext of tackling the rising inflation and to meet growing demand of edible oils. Zero import duty on crude edible oil and very nominal duty on refined Palmolein have favoured the import over domestic oils at the expenses of Indian oilseeds farmers. And the result was a big jump in the imports of edible oil from 5.61 million tonnes in 2007-08 to 8.82 million tonnes in 2009-10.

Another important reason for stagnation in the coconut economy and prices was the negative publicity against coconut oil in the late 90’s by projecting it as a health hazard and creating misconception that it contains unhealthy saturated fats and therefore creates clogged arteries and heart problems which were proved wrong. The truth is saturated fat in coconut is different from those found in animals and contains no cholesterol. But the negative propaganda affected coconut sale to the extent that the government of Kerala had to launch a people's campaign to run down ‘canards'’ spread by vested interests. It is believed that the business lobby for soya and soya oil manufacturers in the US was responsible for creating a health scare over coconut oil consumption. A similar conspiracy was also hatched against mustard-rapeseed oil in north India, by the same vested interest, which led to series of death due to ‘dropsy’ epidemic, caused by adulteration of mustard oil, which broke out in 1999 and claimed more than twenty-three lives in Delhi alone. This created an scare against mustard oil and led to a countrywide ban forcibly shutting down the mustard oil trade. Those who hatched this conspiracy against mustard were successful to some extent in making people change their dietary habit by shifting to soybean oil whose imports increased by almost threefold from 1998 to 2001, from 439,625 to 1,357,920 in just two years. It is believed that the same lobby also influenced the government of India to fix the Bound tariff rate for soybean at 45% while the bound tariff rate for all other edible oil is fixed at 300%.
Coconut Economy and ASEAN India FTA
Though last 20 years of trade liberalization has caused drastic impact on coconut economy but 2011 augurs well with the sharp increase in prices of coconut, each costing between Rs 18 and Rs 30 in the retail market in South India. In early 2011, coconut price even touched Rs 35 in Chamarajnagar in Karnataka due to reduced supply to the local market. On some days against a demand of 1 to 1.5 lakh coconuts, the supply was not even 10,000 pieces in Chamarajnagar. After a long time, almost after two decades, coconut wholesale price was hovering between Rs 8,000 and Rs 12000 per thousand and coconut oil prices have crossed Rs. 10,000 a quintal. The exports of Indian coconut to Middle East have also increased due to ban on exports from Sri Lanka in order to control local prices and fulfill domestic requirement of coconut and coconut oil.

However the increased price level for coconut could prove to be short lived given the drastic tariff reduction commitment under the ASEAN-India FTA (AIFTA) which is currently in its second year of implementation and by December 2013, tariff on 70% of the product will be come down to zero. As tariffs gradually fall in coming years, the FTA is expected to negatively impact crops such as pepper, cardamom, cashew and coconut. Since the southern Indian states and the ASEAN countries produce several similar agricultural products, competition from the latter is a big cause of worry for small and marginal farmers in the south Indian states.

The Free Trade Agreements (FTAs) are generally bilateral agreements signed between two countries or between an individual country and a trading bloc like the ASEAN or European Union (EU). Depending on the bargaining power of the countries involved, FTAs go much further in liberalizing trade, services and investment than multilateral agreements like the WTO. In fact FTAs are another way to ensure that governments implement the liberalisation, privatization and deregulation measures of the corporate globalisation agenda. India has signed full-fledged FTAs (which include investment and services along with goods) with Singapore (June 2005) and South Korea (August 2009) and limited FTAs (limited to goods and which are to be expanded to services and investments) with Sri Lanka (2000), Thailand (2003) and ASEAN (August 2009), Japan (February 2011). Currently, there are several FTAs which are at different stages of negotiations, including with European Free Trade Association (EFTA), the European Union (EU), Australia, New Zealand, Israel, the Gulf Cooperation Council (GCC), Chile, China, Colombia, Egypt, Hong Kong, Russia, Southern African Customs Union (SACU), Uruguay and Venezuela. Moreover, Indian business community is also lobbying for an India-US FTA. All these FTAs are being negotiated undemocratically and in complete secrecy. The public and their parliamentary representatives and even the state governments are denied the right to see any text of these secret trade deals. The FTA agenda does not have a popular democratic mandate and is being pushed by the Prime Ministers Office, a section of the bureaucracy and industry lobbies such the Confederation of Indian Industry (CII) and Federation of Indian Chambers of Commerce and Industry (FICCI). Unfortunately, none of these bilateral trade agreements faced any kind of stiff opposition from any state government, political parties or mass movements except the AIFTA which has come in for both political opposition (from the Left Democratic Front Government of Kerala) and resistance from farmers and fishworkers groups of Southern India states, mainly Kerala. This is not surprising since Kerala found itself at the receiving end of India’s first FTA which was signed with its neighbour Sri Lanka in 2000. The implementation of this trade agreement resulted in an import surge and a resultant sharp drop in domestic prices for pepper and coconut and the initial years of the FTA saw hundreds of farmers in the pepper belt of Wayanad district in Kerala committing suicide.

The AIFTA is going to greatly affect the coconut farmers in India because it will allow the import of coconut oil from the Philippines - a major producer which enjoys significantly lower costs of production. Even though coconut has been put under the Exclusion List, yet it will not be of much help because palm oil from Indonesia and Malaysia will take over the market with the drastic reduction in tariff. However having a product on the Exclusion List does not mean that it will be protected. Local producers could face increased competition from cheaper imports that substitute for locally grown agricultural products and other products included in the Exclusion List. Several agricultural crops could also face increased demand and price uncertainties because many semi-processed or processed versions of these crops are not on the Exclusion List.

The AIFTA will be equally disastrous for the thousands of workers in the coir sector in different coconut producing states. Not only coconut, but this FTA would be a death knell for the plantation sector in India because as per the present pattern of exports, ASEAN accounts for 31.56% of copra, 82.41% of coconut oil, 64% of desiccated coconut and 92% of natural rubber. In 2008, India imported 67% of its total global imports of animal and vegetable oils and fats from Indonesia, followed by about 15% from Malaysia. As for coffee, tea and spices, Indonesia provided nearly 21% and Vietnam 13% of India’s total imports in these two segments in 2008. There is a vast trade deficit between India and ASEAN, while India's exports to the ASEAN countries grew by about 21 per cent, its imports from those countries went up by a whopping 66 per cent between 2005-06 and 2006-07. Thus, under the AIFTA, Indian farmers are likely to encounter significantly increased volumes of imports in the domestic market.

Under the AIFTA, India is committed to reduce or eliminate tariffs on more than 89% of all its agricultural, marine and manufactured goods. Nearly 70% of India’s tariff lines fall under Normal Track-1, for which tariffs decline to zero by 2013. Nearly 9% of India’s tariff lines fall under Normal Track-2, for which tariffs drop to zero by 2016. The 496 products excluded from tariff reduction commitments and included in the Exclusion List constitute 9.8% of India’s total tariff lines, while 11.1% of its total tariff lines come under the Sensitive Track. Special Products constitute just 0.1% of its total tariff lines. Evidently, the vast majority of products come under the lists for tariff rate eliminations by 2013 or 2016.

Given the imminent threat of imports from ASEAN countries under zero duty, the coconut sector need to prepare itself to face the challenge. More so since livelihood of millions of small and marginal farmers in the southern states of India are dependent on the coconut economy. With the increasing requirement for edible oil to the burgeoning population in India, there is also a vast growth opportunity for the coconut sector to take the challenge and fill the gap through enhancing the production, productivity and reducing cost of production.

Coconut oil for edible purposes is now being claimed to be the second best edible oil in the world, after Olive oil. The demand for coconut products will steadily grow at an increasing pace as education, awareness and prosperity reaches more and more people. There is an increasing market for exports of virgin coconut oil in West Asia, Europe and USA as valued health supplement with its medicinal qualities to reduce risk of atherosclerosis and heart disease, reduce risk of cancer and other degenerative conditions, help to heal wounds and reduce acne, aid in the control of diabetes and others, it is time the government must provide proper support for making coconut farming a profitable venture as is being achieved by other coconut growing countries through processing and export of diverse coconut products.

In order to protect the coconut sector, the government of India must adopt a trade policy to curb the import of palm and soya oil and provide necessary support to modernize the production technology to world standards in order help it survive under the onslaught of the FTAs. In view of the increasing inflation and the increasing demand for edible oil for domestic consumption, the government must also provide a remunerative minimum support price for coconut which cover the cost of production and also provide some profit to coconut farmers.

[1] Afsar Jafri is a Research Associate with Focus on the Global South-India, a policy research organization. He can be reached at or +91-9582070803.