Monday October 22, 02:04 AM
Flourmills oppose duty cut
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By Jaishankar Jayaramiah
Roller Flour Millers' Federation of India (RFMFI) has warned that the entire flourmill industry would be hit if the Union government reduced the import duty on wheat flour. The Centre is considering bringing down the duty on flour, reportedly to reduce the shortage for wheat, by restricting the supply to flourmills. Talking to FE, president of RFMFI Dattaraj said that the Central government is considering bringing down the import duty to 0% from the current 36% to import more wheat flour. He said the country has been operating more than 1,000 flourmills, engaging over 10 lakh people as direct and indirect employees. Following the encouragement given in the Agro-Food policy of the Union government during the 10th five year plan and the previous five year plans, he said that most of the flour mills have expanded their capacities. The total wheat crushing capacity of Roller Flour Mills stood at 20-25 million tonne per annum, but they are grinding around only 10-12 million tonne per annum, matching the current flour requirement in the local market. If the government cuts down import duty, MNCs in South East Asian countries will dump wheat flour at a cheaper cost initially. After capturing the market, MNCs will increase the prices and control the market. The most affected would be the flourmills in South India, as the region has a three-side access to other countries via the sea. Also, there is a possibility that downstream industries like biscuit, bread manufacturers might divert their procurement of wheat products to MNCs, forcing flourmills to under-utilise their capacity, finally close down units, resulting in lakhs of employees losing jobs.
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