Briefing

Keep Milk and Milk Products Out of Proposed Free Trade Deal with 16 Countries

Dairy products must be kept out of the Regional Comprehensive Economic Partnership (RCEP) as cheap imports from New Zealand can spell ruin, writes India’s Express’ Rural Affairs and Agriculture Editor, Harish Damodaran, quoting two industry experts.

The proposed free trade agreement comprises the 10 ASEAN countries (Philippines, Brunei, Indonesia, Malaysia, Singapore, Vietnam, Cambodia, Laos, Thailand and Myanmar) and six Indo-Pacific nations (India, China, South Korea, Japan, Australia and New Zealand).

Commerce ministers of these 16 countries will meet in Beijing on August 2-3 to take the negotiations forward. Both G. S. Sodhi,  Managing Director of the Gujarat milk marketing federation better known as Amul, and R.C. Chandramogan, Managing Director of Hatsun Agro Product Limited, India’s largest private sector dairy company, have voiced opposition to the import of milk and milk products from New Zealand.

They say that India’s 175 million tonnes of milk (which exceeds demand – 147.5 million tonnes in 2016-17) is produced by 100 million dairy farmers while New Zealand’s 22 million tonnes of milk is produced by just 10,000 farmers.

Though New Zealand is a small country, it is sparsely populated and has vast tracts where cows are let out to pasture. India’s production cost is high, though its consumer price is lower.  New Zealand produces mainly for export. Though both Australia and New Zealand produce 6.2 percent of the world’s milk their share in global trade is was high: whole milk powder (72.1 percent), skimmed milk powder (21.5 percent), butter (53.3 percent) and cheese (24.8 percent).   New Zealand’s exported 2.55 million tonnes of these products, against India’s 0.472 million tonnes.

New Zealand exports 95.1 percent of its whole milk powder, 87.3 percent of skimmed milk powder, 94.5 percent of butter and 83.6 percent of cheese.

After China signed an FTA with New Zealand, its dairy industry which was growing at 25.5 percent during 2001-06 grew at just 2.7 percent between 2006 and 2011, India’s dairy industry claims.

(Top photo of cows grazing in New Zealand by Vivian Fernandes)

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