India, Farmer’s and Trade Unions Protest against the EU India FTA

Bhartiya Kisan Union Farmers at protest against EU India FTA in Feb 2012

Farmers and trade unions of India have been protesting against the undemocratic EU India free trade agreement. Over the last couple of months, the alliance of organizations called the Anti FTA front has written 872 letters to important officials, organizations and political parties including the Prime Minister and the Members of Parliament about this unfair trade deal. “There are serious impacts on food security, livelihood security of millions of farmers and small retailers and we haven’t even been informed or consulted about the EU India FTA,” said Rakesh Tikait of Bhartiya Kisan Union a member of La Via Campesina. In fact no impact studies have been made available even to the Indian parliament or state governments, let alone the ordinary people of India whose lives are at stake. Ironically, the Indian government has left no stone unturned to show its urgency and deep commitment to European business making media statements about its plans to swiftly conclude the EU India FTA by March this year.


The Indian government has been secretly negotiating at least 56 such Free Trade Agreements. Developed countries like of the EU are resorting more and more to Bilateral Trade Agreements with individual developing countries because they want another way to push the same free trade agenda in agriculture that was rejected unanimously by developing countries at the World Trade Organization.

It is already well known that the benefits of the EU India FTA are skewed in the favor of EU business. EU wants to raise the market share of its primary commodity exports to India, because India is a huge market, and growing fast. The profits for EU companies will be unlimited if they can dump their products in India and even better if they can permanently displace local farmers and producers. In the name of “free trade”, the EU wants India to cut all import duties to zero levels for atleast 92% of imports, but it will not alter its own massive subsidies to its agribusiness and farm sector, ensuring that they can continue to dump subsidized farm products in the Indian market. Indian farmers who don’t have any such support cannot compete with EU agribusiness. Exports from India are also blocked by the EU based on other so called non tarriff barriers like phyto-sanitary and different quality evaluation standards. “They say that free trade is supposed to be trade between equals but such free trade pacts are on a completely unequal footing. They are ending the livelihoods of farmers in developing countries” said Yudhvir Singh of the Bhartiya Kisan Union and La Via Campesina.

Several sensitive agriculture sectors which employ millions are under threat. For instance, EU’s dairy companies are eyeing India’s dairy sector and complaining about India’s high tarrifs. It is well known that the EU has an overproduction problem in the dairy sector and are looking to dump their surplus. Small farmers in both EU and India are under threat. European milk producers have been protesting against the artificially low prices that don’t fulfill even production costs due to high milk quotas. It is the industry that gains everywhere, they pay artificially low prices for the raw material, then they process and package it and charge high prices to the consumers. They also dump products in other countries, depress producer prices there, reduce incomes and eventually increase debt. India’s dairy sector is mostly self sufficient and employs about 90 million people, a majority of whom are 75 million women. The Dairy sector is a lifeline for small and marginal farmers, landless poor and a significant source of income for millions of families. India has already made an excellent global example by creating a vibrant network of cooperative milk federations and women’s groups in the dairy sector. Milk cooperatives like Amul and others are great models of inclusive development that give better bargaining power and fair prices to smallholders and women milk producers. But these gains are now threatened. “The Indian government is saying that dairy is in the negative list, which means tariffs will not be reduced and our dairy sector will be protected. But this is nothing to celebrate because we know that the EU is lobbying hard to open our dairy sector and our current government which is obsessed with foreign investors cannot be trusted to protect farmers,” said S Kannaiyan of the South Indian Coordination Committee of Farmers movements.

The FTA also seeks better protection for European biotechnology companies in the form of stronger intellectual property rights. This will allow European biotech firms to sell their seeds in India at any price they wish, get royalties from Indian farmers, and deprive Indian farmers from saving or exchanging seeds as is usually the custom. Already Indian farmers are reeling in debt and suffering from the failure of expensive GMOs and unaffordable private seeds imposed in agriculture at the cost of our own local seeds and biodiversity. The Bt cotton belt has turned into a suicide belt, mainly due to debt and such FTAs will further push this tendency.

There are also plans to liberalize investment provisions, financial services and banking. This means that European banks and finance companies can enter the Indian market and also that investors from the EU will get preference including over resources like land, coastal areas and water rather than local people. Such provisions facilitate takeovers of farm land and conversion from food crops to export oriented cash crops. E.g. many EU countries with biofuel targets are looking at countries like India for assured feedstock. Foreign banks are not interested in providing services or credit to the poor and rural areas, which are already excluded from the formal banking system. At a time when countries across the world are reeling under a financial crisis caused by private banks, there is a serious need to regulate this sector rather than further liberalize and deregulate them.

The EU is also demanding for the liberalization of the retail sector, thus facilitating the entry of European agro-processing and retail gaints like Carrefour and Tesco who will threaten the livelihoods of small retailers and street vendors. “the entry of such retail giants will be terrible for farmers. They will monopolize the whole food chain from procurement to distribution. We will be at the mercy of such large companies as they will have the power to set prices and also will not be interested to buy small quantities from small producers,” said Nandini Jairam of the Karnataka farmers movement – KRRS.

The last thing Indian farmers or consumers need is another FTA. It will worsen the agrarian crisis and endanger our national ability to produce food. For e..g India used to be totally self sufficient in edible oil, now the government pays a very high edible oil import bill to foreign companies because it has pushed Indian oil producers and processors out of the market by allowing in cheap, subsidized and very unsustainable imports during earlier liberalization sprees. We know the environmental costs of the palm oil industry in South East Asia – they have razed down forests, driven endangered animals to death, and displaced local farmers. Imports of fish, tea, coffee, spices, and palm oil have led to drastic fall in domestic production and destruction of livelihoods. Farmers’ suicides have been high in regions growing some of these crops. By killing our farmers, our policies will also deprive the hungry from food. India already has the worst levels of hunger – half its children suffer from malnutrition and it is 67 out of 82 in the Global Hunder Index. Despite this the Indian Government is possessed by the spirits of liberalization and reforms. It is compromising the interests of Indian consumers, and local farmers who have more than enough capacity to feed the entire country with healthy, nutritious, locally produced food if supported by the right policies.