Over the last many years Pakistan and India are trying to increase their bilateral trade and have taken several measures in this regard. Sometimes developments take place at a fast pace and on other occasions they slow down for various reasons. At the moment Pakistan is mulling grant of Non-Discriminatory Market Access (NDMA) status to India which many think is not much different from MFN status. In fact they claim it’s simply a change of nomenclature made to counter the criticism against the term MFN.
While there are players who are eyeing opportunities under the emerging developments, there are certain sectors in the country which feel threatened mainly due to cheaper exports from India. They are afraid that their products which cost more than their counterparts imported from India will be phased out if India gets this status.
The farmers’ community is one such opponent of the concept of liberalised trade between the two countries, especially in the fields of agricultural products and livestock. Their fears have increased over the years and there is a reason for this. The exportsof agricultural products from India to Pakistan have more than doubled in the past year.
This claim is backed by the data maintained by India’s Agricultural and Processed Food Products Export Development Authority. It states India’s agriculture export to Pakistan was around $146 million between April 2013 and October 2013, nearly 97 per cent higher than its export in the same period in the year before that.
The general stance taken by farmers’ bodies and agriculturists is that the agricultural sector is heavily subsidised in India which makes their products far cheaper than those produced in Pakistan.
However, there are traders who see a window of opportunity in this trade and hope that the prices of agricultural products such as vegetables and fruits would come down. Mushtaq Ahmed, a trader in Lahore Vegetable Market, says liberalised trade will improve competition and make local farmers adopt modern and progressive farming techniques. He tells TNS there were similar fears when Pakistan started importing farm products from China but with the passage of time things settled down. Now Pakistani products are competing with these products very well.
He says another plus point of this trade would be that Pakistan would be able to import cheaper farm inputs and agricultural machinery from India.
Dr Tariq Bucha, President of Farmers’ Associates Pakistan contests these claims and says people remember the price at which they bought bananas when they were imported from India to meet the shortfall. Even in that cases the traders and the middlemen made huge profits. He says they are worried for the farmers who are already living from hand to mouth and do not earn enough to help them sustain.
He says even in Pakistan the prices of farm products are high due to the involvement of middlemen and traders. The farm-gate prices of agricultural products are far less than those at which buyers buy them from the market, he adds.
Bucha says according to latest figures India provides direct and indirect subsidies worth $93 billion per annum to the agricultural sector. There electricity is almost free. Diesel, fertiliser and other inputs are available at a subsidised rate. Whereas in Pakistan fertiliser has to be bought from the black market at Rs 1700 to Rs 1900 as compared to that available to Indian farmer for around Rs 600 per bag. The other issues confronting Pakistani farmers are non-availability of quality seed, load-shedding, dependence on expensive fossil fuel to run tube-wells etc. How can there be fair competition if there is no playing level field.
The issue of subsidies for Indian agricultural products has been under discussion for long and often highlighted in the meetings of the joint task force formed for the purpose of sorting out these matters. Bucha says the Indian members of the body were aware of this issue and they even agreed to the proposal of levying additional customs duty equivalent to the subsidy offered per unit on agricultural imports from India.
What worries Pakistani farmers the most is the fear that India will be allowed to export its farm products round the clock via Wahga border. If this happens it would be disastrous, says Khalid Mehmood Khokhar, President Pakistan Kissan Ittehad. He says in this case thousands of farmers who are members of the Ittehad will block the road leading from the border to the city centre. If India is allowed to use this channel it will be able to flood Pakistani markets with its agricultural goods within a couple of hours, he explains adding there would be no control of the volumes and quantities.
He tells TNS that the Indian government supports its farmers and agricultural sector a lot. It buys 26 crops from farmers whereas in Pakistan they cannot properly procure the only crop -- wheat, which they are supposed to buy at support price.
Hafiz Shahid who belongs to a family dealing in vegetables and fruits, says the concerns of Pakistani farmers are right but they should also keep in mind that they would be able to export vegetables and fruits to a market of 1.2 billion people who are mostly vegetarians. Just imagine Pakistan’s unmatchable mangoes and oranges making inroads into the Indian market.
He adds more imports from India would lower the prices for consumers as the short distance between the two countries would save freight costs.
Khokhar does not buy these arguments and says it is quite unlikely that India will allow Pakistani agricultural products in its territory so easily. It has always used non-tariff barriers (NTBs) to restrict imports from Pakistan and will continue to do that.