US anti-dumping suit may force Indian shrimp farmers to new markets

Mohammad Nayeem, once a prosperous shrimp farmer, is now a worried man.

Farmers like him are in trouble because shrimp buyers have been scared off by a spat over anti-dumping duties planned by the US , India ’s most lucrative market for seafood.

“We have nothing else to do but pray to God,” said Nayeem, adding “We’re being punished for no fault of our own.” He owns 100 acres of shrimp farm in Andhra Pradesh, and used to sell his produce for between Rs 450 and Rs 600 a kg, but now feels lucky if he can get Rs 220 — less than his production cost of Rs 250.

No one knows how much the new levy would be, but if imposed the taxes would take retrospective effect from March 9, Sando Joseph, secretary, Indian Seafood Exporters Association, said. This has driven US buyers to other countries like Indonesia , Bangladesh and Pakistan , he added.

Aquaculture has emerged as a big industry here, employing about 1.2m people in places like Kochi, a trading and fishing port ruled over the centuries by the Portuguese, Dutch and British that calls itself the ‘Queen of the Arabian Sea’. But business has slumped because of the US “anti-dumping duties,” raising the spectre of unemployment for thousands of shrimp farmers, innocent casualties of rising trade tension between the US and India.

Traders exported shrimp and other marine produce worth $1.4bn in the year to March ’03, with the US accounting for nearly 30% of the revenues.

The US International Trade Commission ruling, which followed lobbying by shrimp harvesters from eight US states, clears the way for the commerce department in Washington to set preliminary duties in early June to offset the alleged dumping.

The government will press forward with a legal challenge to the ruling, but industry officials are pessimistic about their chances, given that trade has become such an emotional issue ahead of US presidential elections in November.

The shrimp spat dramatises how globalisation is throwing up winners and losers, turning trade into a political minefield.

While Nayeem and other developing-country farmers prospered from their sales to the US , America ’s shrimp harvest halved to $560m between ’00 and ’02, causing widespread job losses, US officials say. India ’s shrimpers are not the only ones in Washington ’s sights.

The anti-dumping duties also target Brazil , China , Ecuador , Thailand and Vietnam . But the row is particularly keenly felt in India because of an unfolding backlash in the US against an exodus of white-collar jobs to cities such as Bangalore .

India is exploring alternative markets, including Japan , to make up for the loss of lucrative US business, said AJ Tharakan, president of the Indian Seafood Exporters Association. “But it will be a long drawn-out process. It is not easy to establish your presence,” he said. Indian shrimp farms use the latest technology, such as aerators, to regulate the flow of oxygen.

“Shrimp farming is like gambling. You can lose heavily and at times, if everything goes smoothly, you get good returns,” said MC Jojo, who owns a 40 hectare shrimp farm in Kerala.

The shrimps are then taken to processing centres or peeling sheds where women workers wearing colourful traditional dress peel and clean them before packing.

“Offshoring” has become a central election theme for politicians desperate to explain — or exploit — America ’s weak employment growth. India has already warned the US that a US Senate bill that seeks to curb the export of federal government jobs to low-wage countries like India could make it think twice about trying to help revive stalled WTO talks.

“It is a distortion of the global trading environment,” said TK Bhaumik, economic adviser with the Confederation of Indian Industry.

“In the medium term, if these kinds of things continue then obviously it will impact global trade in a big way.”

But Nayeem is tiring of rolling the dice. He is exploring other opportunities. “When I started in ’91 I was told shrimp farming was wrapped in gold and full of dollars,” he said, adding “But now with this anti-dumping issue I think I was a fool to have entered this business.”

TIMES NEWS NETWORK APRIL 25, 2004