Reference no: EM131085941

Case 1: Where is the Fair Play?

In most countries in Europe, and primarily America, they don't prefer the leg meat - it is waste matter for them so they look for nations where they can dump this meat. They did in the Philippines, Sri Lanka and Russia. They might deny it in the US but everybody knows that they are sitting on stocks for at least 2-3 years. They have succeeded in doing that because of their good freezing techniques. Now it's becoming a major problem for them. They're not used to eating leg meat and are in a fix. In the US they actually load the price of the entire chicken on the breast meat, and the rest of the bird is like a carcass to them. Due to environmental reasons they can't dump it in the sea so they have to dump it somewhere. It can be any underdeveloped country, may be India! It's wrong notion that supply of this meat to underdeveloped countries will be good for the consumers there. It is not. Can the Americans guarantee anything - how long will they be able to supply the chicken? How long will they supply subsidized eggs to such a large country? We could end up  destroying our industry base and that will be very sad. As far as chicken is concerned, they can only supply the legs - they can never supply the whole bird. The white meat costs US $3 to 3.5 per pound, so it's out of range. May be the consumer gets the advantage of subsidized supply of the white meat in the short run but over time the consumers' interests are likely to suffer because such a supply will result only in destroying the chicken and egg industry in India. Once their surplus stock gets exhausted they can charge you any price - can they guarantee the price? They can't and they won't.

The chicken/egg business deals with livestock. It is not possible for people to stop producing for a year and come back - they will be finished. Once they are out of the cycle they are out of the industry. It would be very said if that happened to this industry that has grown over the past 25 years. For many people it provides a day-to-day livelihood. Once the foreign players come in and are allowed to sell their products at very low rates, the industry could collapse as it has in other countries. India is a the cheapest egg producer in the world - about Re.1 a piece. But now we are very worried. In European countries, eggs cost between Rs.3-5 but they are able to deliver the same egg to the Middle East at Re 1-1.50. This is because in Western countries they have so many subsidies. When it comes to agriculture, they are very sensitive and protective. If they bring it to the Middle East, then why can't they do it here as well? The government knows that the Western countries are not going to remove subsidies - they know when it comes to agriculture, neither the Europeans nor the Americans are going to do anything. They are going to protect them forever- so where is the fair play?

Questions:

i. What would you recommend to the government to create a level playing field for the local firms and the western exporters of meat to India?

ii. Can you cite any other typical product where India's advantage turns into disadvantages as a result of WTO agreement?