Impact of PTAs & FTAs on Kerala's Agri-sector

Impact of PTAs & FTAs on Kerala's Agri-sector

India has been engaged in a number of free trade agreements during the last one decade. The Indo-Sri Lankan FTA came into existence in March 2000 and  SAARC  area free trade agreement SAFTA became operational from 2006.  The negotiations of Indo-ASEAN FTA have reached the final stage.  It was delayed due to disagreements on the inclusion of certain items in the ‘sensitive list’.

Kerala’s agricultural sector has been facing deep crisis since 1999.  The crisis caused by the price fall in the spices, plantation crops and nut crops between 1999 and 2001 has been reserved to a large extent in the case of most of the crops by 2002 and 2003.  But, in the case of crops like pepper, the price crash persisted till 2006.

While examining the impact of FTA’s certain unique features of kerala’s agriculture affected the livelihood  of farmers in the state need to be noted

• Kerala has 66.57 lakh holdings (as per 2000-01 data) with an average size of holding of 0.22 hectares compared to 1.47 hectares at the national level.

• Agricultural sector is closely linked with the livelihood security of 95% of the state’s population.

• Kerala accounts for 1.56% of the net sown area and 1.61% of gross cropped area in India. 

• The value of output contributed by Kerala in respect of traded crops includes 92.50% of rubber, 85% of black pepper, 81% of cardamom, 55% of tapioca, 50% of the coconut, 33% of coffee, 17% of areacanut, 14% of cashew and 12% of dry ginger.

• At the same time, Kerala’s share in export of the products of these crops was as high as 94% in rubber, 92% of pepper, 83% of spices oil, 74% of cardamom, 67% of cashew kernal, 63% of ginger, 22% of turmeric, 27% of curry powder and 16% of vanilla and 95% of cashew shell oil.

• Kerala accounted for 2/3 (67.45%) share of the export of spices at the national level.  Out of Rs.983 crores of foreign exchange earned in 2004-05 through the export of pepper, cardamom, ginger, turmeric, curry powder, spice oils and oleoresins, nutmeg and mace and vanilla, Kerala contributed as much as Rs. 663 crores which constituted 67.45% share.  Hence, Kerala plays a very decisive role in India’s agricultural exports especially in the case of certain spices and plantation crops.

• Since domestic and international markets are highly interdependent enhanced imports and exports under FTAs will have important implications on the domestic production, consumption, domestic product prices and levels of living of the farmers.

•  It is alleged that the present crisis in pepper and spices has been caused by the enhanced imports of agricultural products consequent on FTAs especially ISFTA.

• One unique feature of Kerala’s agricultural sector is the high degree of trade sensitivity.  Approximately 80% of the gross cropped area is under plantation crops, spices and nut crops. 

Impact of FTAs&PTAs on Kerala's Agri sector
Impact of ISFTA on Kerala
Impact of Indo- ASEAN FTA on Kerala
Farmers' distress in Wyand

Last Updated on:28-12-2007