Agricultural and Processed Food Products Export Development Authority (APEDA), established in 1985, has been instrumental in identifying new markets and providing better support systems to exporters of agricultural and processed food products. In a tête-à-tête with The Dollar Business, Devendra Kumar Singh, Chairman of APEDA, throws light on the various initiatives that APEDA is taking up to give exports a boost.

Interview by Ahmad Shariq khan & Niladri S. Nath | August 2017 Issue | The Dollar Business

TDB: How did Indian agricultural and processed food sector perform on the export front last fiscal and what was APEDA’s contribution to it?

Devendra Kumar Singh (DKS): According to the Directorate General of Commercial Intelligence and Statistics (DGCIS), in FY2017, exports of agricultural products contributed about 12% to India’s total exports ($33.38 billion out of India’s total of $276.28 billion). Out of this $33.38 billion, about $16.25 billion was under APEDA’s supervision.

A lot of positive developments took place in FY2017. For instance, grape exports went up by 37% y-o-y with grape exporters gaining market access to Canada. APEDA also undertook several initiatives to boost exports of mango by arranging visits of quarantine officials from US, Japan and South Korea to the irradiation and vapour heat treatment centres located in Lasalgaon and Vashi in Maharashtra, Bengaluru in Karnataka and Tirupati in Andhra Pradesh.

In addition, we received approvals from the General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) of China for 25 of our Hot Water Treatment (HWT) facilities for the disinfestation of mangoes – this will boost exports to China. Vietnam too has lifted the ban on imports of peanuts from India. Additionally, exports to Russia are also expected to begin soon as they have agreed to accept health certificates issued by Indian authorities.

TDB: What are the other initiatives that the government has taken to promote agricultural exports from India?

DKS: To start with, the government has introduced some amendments in the organic products segment. For instance, the quota for export of organic pulses and lentils has now been increased to 50,000 metric tonne (MT) from 10,000 MT, and the cap on the exports of organic wheat and sugar has been removed. The government has also been actively trying to boost cultivation of lychee in Bihar and kiwi in the north-eastern region of India. Additionally, the government is making efforts to promote exports of pomegranate to countries like US. State governments of Gujarat, Karnataka, Kerala, Telangana, etc., in association with APEDA, have been working to promote horticulture, which we believe holds immense untapped potential for exports.

TDB: We understand that exporters are still facing market access issues in several countries. How is APEDA helping?

DKS: We have been taking up the issue with countries like Vietnam, US, Australia, New Zealand and South Africa for the exports of grapes; China for the export of millets, bovine meats and rice; South Africa for exports of mango; US and EU for the exports of rice; and Russia for the export of dairy products. Each department is putting in its best effort to fulfil the requirements of these countries.

TDB: Food safety regulations have been a challenge for Indian exporters. What is APEDA doing to facilitate exports?

DKS: Globally, there are growing concerns on food safety, especially with respect to sanitary aspects such as pesticide residues. APEDA has been working constantly on these aspects and has developed a residue monitoring plan (RMP) for grapes, pomegranates, groundnuts and some other key produces. We have also introduced the concept of clusters, which is efficient because it offers an organised way of disseminating information and procuring produce from registered farmers. Speaking about non-tariff barriers, one of the major issues is the stringent residue levels prescribed by several countries – especially EU. It has become mandatory for the exporting country to deploy latest technology and equipment to detect residue levels, which is an expensive process. APEDA has been assisting laboratories to acquire the requisite state-of-the art equipment.

TDB: Are you focussing on some particular countries to increase exports?

DKS: We are focussing on mango exports to South Korea and Iran. This year, our efforts, in conjunction with the National Plant Protection Organisation (NPPO) of the Ministry of Agriculture and Farmers Welfare, have resulted in exporters gaining market access to South Korea for export of mangoes.

The Commonwealth of Independent States (CIS) is also an important market for India’s agricultural products. In FY2017, exports of agricultural and processed food products under APEDA’s supervision to CIS countries was $279.6 million. The value has decreased compared to previous years, and APEDA has been making efforts to boost exports by engaging in bilateral discussions.

TDB: APEDA has been quite proactive in infrastructure development, product quality enhancement, etc. Can you shed some more light on such initiatives?

DKS: Infrastructure is the key to success and can help us export high-quality produce. APEDA has been encouraging state agencies and registered exporters to develop robust infrastructure for exports. In the last two decades, APEDA has financially assisted more than 100 common infrastructure projects with funding support of about Rs.450 crore. This has not only helped in improving the shelf-life of our export products but also augmented their ability to withstand the journey to their export destinations.

APEDA has also assisted industry stakeholders in developing more than 250 pack houses for horticulture products. Fruits and vegetables, which are being shipped to EU, are now processed at APEDA-recognised pack houses. We have also assisted exporters in setting up in-house laboratories. The 41 APEDA-recognised laboratories now carry out sophisticated testing to detect aflatoxins and pesticides residues in the product. Additionally, APEDA has been offering exporters financial assistance for implementing quality management systems such as ISO, Hazard Analysis Critical Control Points (HACCP), Good Agricultural Practices (GAP) and more.

TDB: What is APEDA doing to boost exports of ready-to-eat products?

DKS: Ready-to-eat (RTE) products, such as biscuits, confectionery, breakfast cereals, etc., have an enormous export potential because of changing lifestyles the world over. Several Indian exporters have set up state-of-the-art RTE production units and exports from this segment has been witnessing year-on-year growth. In FY2015, total exports of RTE products was $512 million, which grew to about $550 million in FY2017. And since this is a huge opportunity, APEDA has been helping exporters by facilitating their participation in international trade fairs.

TDB: What is APEDA doing to stem the decline in basmati rice exports?

DKS: It is really disappointing that basmati exports have been witnessing a decline – from $4,518 million in FY2015 to $3,230.25 million in FY2017. To arrest this decline, APEDA is developing a web-based traceability system to register farmers, millers, merchant exporters and traders. The Council is developing a certification system – a logo which will work as a trademark – that is in harmony with standards of Export Inspection Council of India (EIC) and Food Safety and Standards Authority of India (FSSAI).

TDB: Do you think the government’s recent decision to ban the sale of cattle for slaughter will impact exports?

DKS: Yes, I think the policy will impact meat exports in the short run. The development can also have wide-ranging ramifications on our future exports. Any disruption in the exports supply chain can impact our global market share and it may be difficult for us to recapture lost ground. To protect the interest of exporters, we have shared their concerns with the relevant authorities.

That said, India has a 20% share in the global market for bovine meat. But, the competition is heating up with countries like Brazil and Australia in markets like Egypt, Thailand, Kuwait, Qatar, etc., where our footprints are relatively small. We have to look for ways to improve our quality, which is the key differentiator.

"There is a need to create separate HS codes for several fruit products"

TDB: Of late, the government has been actively promoting exports of organic products. How is APEDA pitching in?

DKS: Organic farming is taking roots in the country at a rapid clip. Currently, there are 10.92 lakh farmers registered under APEDA TraceNet System, who are classified into more than 3,300 grower groups and 1,512 individual growers. Besides, there are 80-85 processors and 898 traders who are certified operators under National Programme for Organic Production (NPOP). Last financial year, the total exports of organic products from India was around $370 million.

Currently, 28 certification bodies are engaged in issuing certificates for organic crop, livestock, aquaculture, etc., and recently, four more categories have been added to the list viz. mushrooms, seaweeds, aquatic plants and greenhouse crops. To give a fillip to the sector, APEDA has facilitated recognition agreements with EU, US and Switzerland, and negotiations for such bilateral recognition arrangements with Japan, Korea, Canada and Taiwan are in the final leg.

TDB: Is price volatility in global markets affecting India’s grain exports?

DKS: As of now, the volume of our grain exports is small. The prices of most of the grains are based on the domestic minimum support price (MSP), which does not change often. So, when the international prices change, Indian grains become uncompetitive in the global market. As a result, Indian exporters find it difficult to honour long-term and high volume export commitments.

TDB: Do you have any suggestions for the FTP 2015-2020 mid-term review?

DKS: We expect stability in the policy and continuity in the schemes. Also, there is need to create separate HS codes for fruit products such as makhana, lotus seeds, etc. And, presently, using pack house is mandatory only while exporting to EU and developed countries. Using APEDA-recognised pack houses can be made mandatory for all agri-exports.