‘To export value-added products, curbs on oilseeds import must go’

In the basket of agricultural exports, oilseeds – mainly, selected groundnut kernels and sesame seeds – have emerged as an important commodity earning foreign exchange of Rs 7,000-8,000 crore a year. With food safety and food quality standards becoming rigid around the world, compliance is now a critical issue for exporters.

Kishore Tanna, recently elected as Chairman of Indian Oilseeds and Produce Export Promotion Council (IOPEPC) under Ministry of Commerce, shares with Business Line his views on current challenges and way forward for promoting oilseeds exports.

You have been associated with the oilseeds industry and trade for 40 years. What are the major challenges of the oilseeds export business and howdo you propose to address them?

Engaged in the development and promotion of exports of oilseeds,vegetable oils and oilcakes, the Indian Oilseeds and Produce Export PromotionCouncil (IOPEPC), formerly IOPEA, has been catering to the needs of exporters for several years. Besides focusing on promoting exports, the council also works towards strengthening domestic supply chain by encouraging all stakeholders covering farmers, shellers, processors, surveyors and exporters to enhance the quality of oilseeds. The major challenge before us is yield enhancement (currently, a mere one tonne a hectare) and export quality improvement to meet users’ needs. We are keen growers are encouraged to use high-yielding varieties and adopt sustainable agronomic practices. Renewed R & D efforts to develop seeds appropriate to soil and climatic conditions would help. We believe, limited availability of certified seeds is a constraint. The amount of certified seeds available is far short of the actual need. We at IOPEPC are coordinating with the stakeholders including farmers, scientists, extension workers and the Government machinery to raise oilseed yields. Quality of export goods is critical because of India’s international commitment under WTO Agreement on Agriculture covering Sanitary and Phyto-sanitary Measures (SPS) which mandates that every exporting country ensures that agricultural products meet the importing countries’ quality norms. So, we constantly strive to spread quality awareness among all market participants. Additionally, we continue to address issues like restricted market access which our exports face in countries such as China, Japan and the EU because of tariff and non-tariff barriers. To enhance the export competitiveness of Indian oilseeds, we advocate removal of restrictions on oilseeds import so as to encourage domestic processing and re-export of value added oilseed-based products. We continue to pursue this issue at appropriate levels. Finally, produce quality is an issue not only for exports but also for the domestic market.

When talking of quality up-gradation, what specific steps do you recommend the exporters take to meet the market demand?

For discerning overseas markets, quality is of paramount importance. So, our exporters have to conscientiously work towards meeting the food safety and health requirements of the importing countries. We encourage our members engaged in food business to follow internationally acceptable and widely used food safety management systems such as HACCP (Hazard Analysis and Critical Control Points). No doubt, quality control systems mean additional investment and costs; but such cost is minuscule compared with export earnings and credibility of business. Simply put, quality comes with a price. We keep harping that ‘better quality begets better price’.

It is heartening that the Government provides financial and other support to help upgrade quality. I would urge all oilseeds exporters to implement food safety management systems such as HACCP, ISO-22000 etc so as to conform tothe importing countries’ quality standards. We closely work with APEDA to provide help and guidance for this.

Are there specific regions from where exporters source the produce?

Gujarat has been the main groundnut producer. In recent years, Rajasthanin western parts and Andhra Pradesh, Karnataka and Tamil Nadu in the South have emerged as groundnut producing States. IOPEPC has taken initiatives to spread awareness in these areas for upgrading groundnut processing facilities. Similarly, eastern India has begun to grow sesame seed particularly for oil extraction.

How has the world market for peanuts (groundnut) evolved over the last 20 years; and how has India responded?

The European Union has been the largest importer of peanuts in the world, mainly the Netherlands and Germany. EU imports over last many years have been around 7,00,000 tonnes per annum. China was a net exporter earlier, but of late has confined its export to superior varieties. It has started to import crush quality peanuts mainly for oil. The market is constantly evolving; and is clearly segmented from a quality perspective. The European market for premium quality –bold size, uniform, aflatoxin-free – is tough to cater to, while South-East Asian countries such as Indonesia, Malaysia and the Philippines regularly import from us on considerations of price and quality.

Overall, I must say, India has responded well to global market dynamics during last two decades and has retained its position in peanut exports. Some 10-12 years ago, our exports averaged about 1.5 lakh tonnes which has now risen five-fold to nearly eight lakh tonnes (2011-12) displacing Argentina to gain the top spot as world’s largest exporter.

In sesame seed, India is world’s largest producer and exporter.

How about promoting export of value added products?

IOPEPC favours export of value-added products such as blanched peanuts and peanut butter. These value-added products deserve export incentives because of their potential to create jobs and earn foreign exchange.

Similarly, our efforts have helped promote export of hulled sesame seed, a value-added product. We strive to create awareness among market participantsabout export potential of value added products.

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