The National Dairy Development Board (NDDB) has asked the commerce ministry to impose anti-dumping duties on various milk products, including butter oil, skimmed milk powder (SMP) and whole milk powder (WMP), which are allegedly being imported at artificially low prices by food majors like Hindustan Lever, Indo-Nippon Foods, Monsanto Manufacturing and Sterling Agro Industries. Government sources said the commerce ministry was examining the charges levied against these companies by NDDB.
Apart from seeking immediate imposition of anti-dumping duty on dairy imports from the European Union, the US and Australia, NDDB has also urged the government to re-negotiate Indias base rate duty for all dairy commodities under Article XXVIII of GATT to 60 per cent, with a final bound tariff of 40 per cent by the year 2004-5 the Uruguay Round deadline for establishing tariff structures in line with World Trade Organisation regulations. At present, no duty is levied by India on SMP and WMP products and the duty on butter oil amounts to about 35 per cent.
In a letter to commerce secretary P P Prabhu, NDDB chief V Kurien has pointed out that international dairy product prices are distorted by the massive subsidies given to the industry in most developed countries. Notable examples include the European Communitys Export Restitution Scheme and the US Dairy Export Incentive Programme.
Various private parties, including Indo-Nippon Foods Ltd, Monsanto Manufacturing Pvt Ltd, Sterling Agro Industries, Hindustan Lever and MP Clyehem Industries have imported butter oil at a weighted average landed cost ranging from Rs 55.29 to Rs 67.37 per kg.
Inclusive of the prevailing 35 per cent, the overall average price works out to be about Rs 78,000/metric tonne. In view of the attractive price differential between local ghee prices and landed cost of imported butter oil, current tariff levels are inadequate to discourage this inflow of subsidised dairy products, Kurien stated in his letter.
Although the volume of dairy product imports has been relatively modest, the board has emphasised that the inflow of some subsidised products, especially butter oil, has been rising.
According to the board, after the formation of the International Dairy Arrangement in 1980, most importing countries have imposed high tariffs to mitigate global dairy price distortions, which will continue till 2004-5.
During this transition period, other importing nations have taken relatively strong stands through imposition of appropriate tariffs. For instance, Bangladesh has tariffs on dairy products bound at 200 per cent ; Pakistan at 100 per cent and Sri Lanka at 50 per cent etc. In this context, Indias present rate of zero import duty on SMP and WMP and the current 35 per cent on butter oil deserves urgent reconsideration, the letter emphasised.
