[Agro/Food Processing] Export, Dumping, FDI, Finance, Taxation, Budget Provisions, CODEX, NWR, BRGF, RKVY
- Agriculture Export
- FDI: Agro, Food Processing, Retail
- Food processing industry: Awesomeness and Obstacles
- Food processing industry: ruckload of Government Schemes and bodies
- Marketing of agricultural produce: issues and constrains, Nuisance of APMC Acts and Commission Agents
|New GS-Mains Syllabus of UPSC||Topic touched in this article|
|Agriculture export: Anti-dumping, tariff-non tariff barriers, Codex and HACCP standards.|
|Backward regions grant fund (BRGF)|
|Warehousing Development and Regulatory Authority.|
|FDI policy for agriculture, food processing and retail|
|Budget 2013 for Agriculture and Food industries|
|The finance/credit problems faced by farmers+ food-entrepreneurs.|
- In the Colonization-era, British had imposed heavy taxes on Indian textile coming to London, in order to protect their local industries from competition.
- Before the LPG reforms of 1991, India too had imposed heavy taxes on most of the imported items: be it wristwatches, goggles, cars or radios.
- Aug 2013, Union Government increased the import duty on gold to 8 per cent to reduce the gold consumption (and to provide sustainable livelihood to desi-smugglers who were not given 100 days in work under MNREGA.)
- When businessmen export goods at a price that is less than the price charged in the domestic market- it's called dumping.
- WTO system=> Agreement on Subsidies and Countervailing Measures (SCM)=if a country finds evidence of dumping, it can extra impose duty (known as countervailing duty, CVD) on such dumped products. (=meaning this type of tariff barrier is permitted in WTO)
- USA has imposed a countervailing duty (~6%) on Indian frozen shrimps, because Indian shrimp gets plenty of subsidies from Indian government for shrimp farming and export and hence Indians are able to dump shrimps to USA and hurt USA's local shrimp businessmen. (or atleast that's what America claims).
- Anyways, Indian shrimps are not the only items subjected to anti-dumping duty in USA.
|Shrimps from||Why subjected to anti-dumping duty in USA?|
|Thailand||government buys shrimp from farmers and sells it to processors at low price|
|China||government gave finance to build the world's largest shrimp-processing and export plant|
|Malaysia||government gave finance to build shrimp farms.|
Dumping by India
|Country||Which Indian export was slapped Anti-Dumping duty|
|China||Recently China also started Anti-dumping investigation on Indian exports such as|
|Indonesia||Against two leading Indian steel firms: Jindal and Essar.|
Dumping to India (by foreigners)
- We've slapped anti-dumping duty on steel wheels imported from China used in commercial vehicles.
- Under probe: US, China, Malaysia and Taiwan: Because They're exporting solar equipment to India at ridiculously low prices and was bleeding the desi industry. Similar issue with glassmakers and electric cable manufacturers from those countries.
|Quantitative restrictions||Under Gold control Acts of 1960s, An Indian Gold Smith was not allowed to possess a stock of more than 300 gms of primary gold at any time.|
|Import prohibitions||On ivory, fur, tiger skin/bones, narcotics, illegal weapons, explosives etc.|
|Import licensing||When Murthy started Infosys, he had to make 50 trips to Delhi for three years just to get a license to import computers.|
|Export Subsidies||We already saw some duty credit schemes for Agri-exports in the second article. click me|
|Labour/Environment standards||e.g. some developed country banning import from third world country saying child labour was used etc.|
|Health Standards||Codex, HACCP- given below.|
- In the 60s, FAO+WHO setup Codex Alimentarius Commission.
- To develop harmonised international food standards, guidelines and codes.
- In WTO system => Sanitary and Phytosanitary measures (SPS Agreement) – a country can impose ban on imported food products, if they do not meet the Codex standards. (=meaning this type of non-tariff barrier is permitted in WTO).
- and as you can guess, Indian food products get banned/restricted in developed countries for not meeting those quality standards
- This is a two-way street though, India also banned import of American Chicken to 'prevent Avian influenza' among Indian poultry. (Although USA has dragged India to WTO saying India has not provided any scientific evidence in line with international standards to justify this ban.)
- Anyways, here are some of the Indian food export, there were banned in US/EU/China/Japan in past.
|Indian food item||banned/restricted abroad thanks to|
|stone weevil, fungus|
|Heavy metals and antibiotics|
|bird flu/Avian influenza|
- We've to invite their food inspectors/specialists to India, let them check our premises
- We've to bear all the cost of their accommodation, travel expenses etc.
- HACCP (Hazard Analysis Critical Control Point)
- This certification system is adopted by the Codex Alimentarius Commission.
- For preventing microbiological, chemical and physical contamination along the food supply chain.
- So, if you want to safely export food products to US/EU, then first you need to get certificate that your plant meets the HACCP standards. (certificate system similar to ISO standards)
|EIC||Export Inspection Council of India (EIC)|
EIC approved units have to implement following
EIC certificate is recognized in European Commission (EC) for marine products and basmati rice and by the US for black pepper.
|collaboration||We're collaborating with USA, UK, Netherlands, Switzerland and Germany for Agri-technology transfer, financial and marketing tieup and quality control.|
General Area: max 15 lakh assistance
NE, difficult area: max. 20 lakh
|Negotiation||Government needs to expedite the negotiations with US, EU, China and Japan, to lift restrictions on Indian fruit/food/marine exports into these countries.|
|Certification||APEDA already supports the cost of quality certification programs such as HACCP and Eurepgap for grapes and peanuts. More food-items should be included in this scheme.|
|Seeds||Seeds and planting material, their development and production|