Import duty on raw silk upped from 5 per cent to 15 per cent

By late afternoon on Thursday, the mood at the government silk cocoon market yards in Ramanagaram and Mandya lifted after officials informed sericulture farmers that the Union Budget had proposed an increase in the import duty on raw silk from 5 per cent to 15 per cent.

In the two years since the Union government cut import duty from 30 per cent to 5 per cent, sericulture farmers in the State have been in deep distress. Though the market recovered from the initial spell when the price of silk cocoons fell from Rs. 350 to Rs. 380 a kg to Rs. 120 a kg, the price of cocoons and domestic raw silk has been fluctuating since. In fact, over this period, at least two sericulture farmer suicides were reported from this area, apparently triggered by financial distress.

Thursday’s “good news”, farmers say, has come after a dry spell in which productivity has been hit, mainly by acute water shortage. Prices in February, on average, have been lower by Rs. 70, when compared with the previous month, said Bore Gowda, a sericulture farmer from Ramanagaram.

Reelers too have welcomed the budget announcement. Nayaz, who owns a small reeling unit in Mandya, says this will increase the demand for home-grown silk in the market.

Currently, home-grown silk sells at Rs. 2,400 to Rs. 2,800 a kg, which is Rs. 300 to Rs. 500 more than the price of raw silk imported from China. Karnataka produces more than half the country’s silk. Nearly 1.25 lakh families are dependant on this sector, which produces 8,000 tonnes of silk annually.

Farmers’ organisations had campaigned and organised several State- and national-level struggles on the issue, seeking the restoration of import duty at 30 per cent. G.C. Bayya Reddy, member of the All-India Struggle Committee Against Duty-Free Silk Import, terms the announcement a “partial victory” for their struggles. The intervention, he says, has come at a time when farmers are “under tremendous pressure” with increasing input costs, particularly due to power shortage and water scarcity. Mr. Reddy said that the support price, which had been fixed by the State government, had brought little relief to the farmers.

Coming under pressure from farmers’ groups, the State government too had written to the Union government seeking an increase in the import duty. Shantharaj, Deputy Director, Sericulture Department, Mandya, says the decision will give a “strong fillip” to the sericulture sector. “After the 2010 decision, the sector saw very hard times. In fact, the import duty should be brought back to 30 per cent to further revive this sector. Many livelihoods, across the industry, depend on this,” he said.

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