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February 17, 1999


Kerala opposes Centre's items list for free trade with Lanka

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D Jose in Thiruvananthapuram

Kerala has raised serious objection to the move by the Government of India to include plantation crops, coconut and spices in the list of 1000 items being prepared to be included in the Indo-Sri Lankan trade pact for free import from Sri Lanka.

The list is expected to be finalised within the next three weeks. The state's views in this connection were conveyed to the Union Commerce Secretary P P Prabhu by a team of ministers and officials headed by Kerala's Finance Minister T Sivadasa Menon during a high-level meeting here on Thursday.

Prabhu was deputed by Prime Minister Atal Bihari Vajpayee to elicit the state's view after Chief Minister E K Nayanar raised the issue during the PM's recent visit to the state.

Member of the State Planning Board E M Sreedharan Nampoothiripad, who took part in the discussions, told the Rediff On The NeT that the state team had impressed upon the senior Central government official about the adverse impact of duty-free import of cash crops and spice on the farmers and state economy.

The team said that the imports of plantation crops like tea, coffee, rubber and cardamon account would deal a big blow to the state economy since it covers 22.54 per cent of the cropped area in the state and accounts for one-fourth of the state's income from agriculture.

It will also affect the national economy since the plantation crops in Kerala account for 46 per cent of the planted area and 41 per cent of the production in India today, Sreedharan said.

Rubber is already passing through a tough time with the price touching a seven-year low of Rs 24 per kg. Kerala accounts for 94 per cent of the production of natural rubber and about one million small and tiny growers contribute 87 per cent of the state's production.

The steady decline in the price for the last two years played havoc with the life of this poor category. However, Prabhu tried to play down the threat from Sri Lanka over rubber since the island-country produces only 1800 tonnes compared to India's production of 6000 tonnes per annum.

However, the state team said that the threat of natural rubber, landing in Sri Lanka from other rubber producing countries, being diverted to Kerala was real and this would affect the already fragile market.

Cardamom had only recently recovered its ground after facing threat from smuggled Guatemalan cardamom for more than two years.

Coconut is considered the most vulnerable commodity, which would face the maximum brunt of duty-free imports from Sri Lanka. Coconut, which accounts for 45 per cent of the cropped area in the state, is directly linked with the rural prosperity in Kerala.

The sector is dominated by more than 1.3 million small growers. The step has come at a time when the government has decided to pump in more than Rs 10 billion to boost coconut production in the state.

The virtual monopoly the state enjoys over pepper, will be affected if the commodity finds its place in the negative list. Pepper now accounts for 191,000 hectares out of 198,000 hectares in India in 1995-96 according to the 1997 state economic review. Nearly 40 per cent of the domestic output is exported.

In the case of tea, exports accounted for 20 to 30 per cent of the production, which has been witnessing a steady increase. The government has set a target of producing one billion kg by 2000 as against the present production of 811 million kg.

The tea sector has been under stress due to declining price and mounting cost of production for the past couple of years.

Sreedharan said that Prabbu was impressed with the case presented by the state team with regard to all commodities, except rubber.

According to Sreedharan, the Union Commerce Secretary has assured to convey the feelings of the government and farmers to the Central government. It may be recalled that the state Legislative Assembly had adopted a unanimous resolution recently urging the Union government to exclude the plantation and cash crops from the negative list.

Prabhu had also separate discussions with farmers' bodies like the Association of Plantations of Kerala, the Cardamom Growers Association, the Coir Federation and the Rubber Growers Association.

The government expects to mount further pressure on the Central government when the Union Commerce Minister Ramakrishna Hegde visits the state some time next week.

The opposition parties in the state have been urging the Communist-led government to mount a joint campaign to see that the cash crops and spices are not excluded from the negative list, as these crops form the backbone of the state economy.

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