As 2004 dawned over Nellore in Andhra Pradesh, farmers set out to tend their shrimp farms, little realising that their American counterparts had fired a salvo that could nix their livelihood-annual earnings of about $425 million (Rs 1,900 crore) from exports to the US.

On December 31, the Southern Shrimp Alliance (SSA), representing eight southern US states, filed an anti-dumping petition with the US International Trade Commission (USITC) against eight countries, including Thailand, China, Vietnam and India. Their argument: between 2000 and 2002, aggregate shrimp imports of the US increased 17 per cent and import prices plunged 29 per cent. As a result, the US' shrimp suppliers were priced out of competition and thousands of shrimpers in the eight states faced a threat to their livelihoods.

EXPORT STINK: Indian shrimp farms are cost effective

"Shrimping in the US is more than a business, it's a way of life. Today, shrimpers, their families, related businesses and communities are experiencing serious economic harm," says SSA president Eddie Gordon.

The demand for protection has come at a time when the US is in election mode and there is considerable anger over the loss of nearly two million jobs in three years. Already, Congressmen from the south have endorsed a stiff letter of support drafted by Texas Congressman Solomon Ortiz, a Democrat, to US Trade Representative Robert Zoellick. With the southern states forming the backbone of the Republican Party, the issue is politically sensitive to the present administration.

In the past two years, technological advance has led to the emergence of shrimp farms all over the world as a substitute to shrimp fishing-mostly practised in the US-wreaking havoc in the US market. Shrimp farms rely on cheap labour, lending the Indian and other exporters a cost edge over the US shrimpers.

Following up on the petition, the USITC met the concerned parties on January 21 (see box). If it gives a green signal on February 17, a probe will determine the extent of damage to the US shrimpers and the dumping margin that will be imposed. At the commission, India was represented by officials from the Ministry of Commerce, its Washington-based legal counsel, Garvey Schubert Barer, and representatives of major shrimp exporters. The Indian strategy is twofold. While it has joined forces with the affected parties, it has retained an independent counsel to avoid being lumped with the other countries.

India's shrimp exports to the US have grown steadily in the past few years, increasing 136 per cent since 1999-2000, according to the Marine Product Export Development Agency. During this period, India moved up seven places to become the fourth largest exporter of shrimp to the US. Over 65 per cent of these exports are from shrimp farms. "The US shrimp industry failed to anticipate the dramatic changes in production methods," says Wally Stevens, president of the American Sea Food Distributors Association (ASDA).

Meanwhile, India and the other countries received a boost when the ASDA joined ranks with them to oppose the SSA. But till the USITC announces its decision, Indian shrimpers will be all at sea.

— By Anil Padmanabhan