UK-India FTA raises concerns among British rice millers

A 1 billion ($1.2 billion) corner of the UK economy is fearing for its future as Britain and India close in on a long-awaited free-trade agreement.

British rice millers such as Tilda and Veetee Rice have thrived for decades by importing low-tariff unmilled brown rice from the likes of India and Pakistan and “polishing” the grains into the white product loved by UK consumers.

But with India pressing for tariffs on white rice to be slashed, and little feedback from British trade officials, concerns are mounting for an industry that employs more than 3,000 people at 16 mills and processing plants scattered from Kent in southern England to Yorkshire in the north.

“It is crucial that existing tariffs on milled (white) rice are maintained,” Alex Waugh, outgoing director of The Rice Association, said at a private event in the House of Commons last month attended by rice industry leaders and government officials. “If access on milled rice is conceded, the basis of operations will be undermined, the incentive for future investment in the UK will be lost and ultimately jobs will go.”

A spokesperson for the UK Department for Business and Trade said officials were working towards an “ambitious trade deal.”

“We have always been clear we will only sign a deal that is fair, balanced and ultimately in the best interests of the British people and the economy,” the spokesperson said.One person with knowledge of the UK dialog said the question of tariffs on rice was yet to be fully addressed, adding that it was a contentious issue and that the two sides were still some way off ironing out the more “difficult” details of a trade deal.A separate source with knowledge of the Indian negotiating team confirmed that the subject of tariffs on rice was very sensitive, and that an agreement had not yet been reached.

Currently, the UK imports vast quantities of brown rice from India around 150,000 metric tons, or a quarter of its total rice imports, originate in the country. Import tariffs make this cost-effective. The levy on brown basmati is 25 a ton, or zero if it’s included in a list of special varieties. That’s much lower the levy on white basmati, at around 121 a ton.

Slashing the tariff on white rice would leave UK mills redundant, industry leaders claim, while bringing negligible price benefits for consumers, threatening security of supply and potentially risking a drop in quality.

Waugh contends there would be little gain for India from lower UK tariffs. Farmers in the country already tend to get a better price from UK mills than from domestic players for their brown rice, he said, since those buyers need to secure pesticide compliance and are increasingly keen to source rice with improved sustainability credentials.

For Indian millers, meanwhile, the quantities of their milled rice which would be exported to the UK are likely to be too small to really move the dial on their profits.

The downsides for the UK extend beyond lost jobs and production, Waugh added.

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