The Financial Express (Delhi Edition)
Domestic industry worried over import of cheap American poultry products
Pune, June 19: India lost a case with the World Trade Organization ruling that Indian ban on import of poultry meat, eggs and live pigs from the US was “inconsistent” with the inter national norms. India will have 12-18 months to implement this ruling, after which the US can begin exports of these products to India. The Compound Feed Manufacturers Association (CLFMA) of India has been cautioning the government about the impact on the Indian poultry sector.
Amit Saraogi, chairman, CLFMA, says the association is in constant touch with the gover nment to find a solution to this issue and see if FSSAI regulations could make a difference. If we start getting cheaper chicken legs, the domestic poultry industry will be destroyed, he said at the sidelines of a meet held in Pune.
“The cost of one processed chicken to domestic companies is around $3 per chicken, but it is just $1 per chicken for US companies, so if they are entering at this rates, you can see the impact. This could damage industry to the extent of 3040%,” he said. The poultry industry in India is to the tune of R80,000 crore of which 65% of the market consists of chicken and 35% comes from eggs. Saraogi says the association is still in the process of finding ways and means to tackle the situation.
The WTO recently upheld a ruling that India was unfairly blocking imports of US poultry and eggs. Under WTO rules, India will be given a period of time to dismantle the trade barriers that have been found to be illegal. If it fails to dismantle the barriers, the US would have the right to impose trade sanctions against India equal to the amount of lost agricultural trade.
The US poultry industry has estimated that exports of poultry meat alone could exceed $300 million annually once India’s restrictions are removed.
Currently, the US exports 20% of its poultry meat production each year. The US intends to export chicken legs, which are in high demand in India. Legs are treated as waste in the US along with chicken beak and other parts, while chicken legs are sold at a premium in India.
According to Saraogi the share of chicken legs is around 40% of the $9.37 billion (R60,000 crore) Indian market. He also said the qualityof chickenlegsfrom the US is not good, asserting that American exporters keep the legs for months, before they export them to other countries.
The US had dragged India to the WTO on 6 March 2012 saying that India imposed the trade barriers in 2007 to prevent avian influenza from entering the country. India’s Ministry of Commerce and Industry had informed the dispute settlement body that the primary reason for restricting the entry of various agricultural products from the US was because of concerns about the spread of the avian influenza, but the WTO ruled that these restrictions were not equally applied to other countries affected by the disease, and that they were not backed up by the relevant scientific evidence.
The European Union, Australia, China, Japan, Colombia, Ecuador, Guatemala, Vietnam, Argentina and Brazil subsequently joined as third parties in the dispute.
The Association has also urged the government to consider the import of soymeal.
Currently the industry produces 9 million tonnes of which 70 % is used for animal feed. It wants the government to allow duty- free imports of soybean meal and other oil meals.