Opinion

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Thanks to a large production base for agriculture commodities, India is among the top 10 WTO members in exports of agriculture commodities. The country has a surplus in food product exports. India’s key export markets include the US, the EU, Asean, Saarc countries and West Asia.

While there is a strong commitment from the Government to promote exports of fresh and processed food products, and a strong willingness on part of the exporters and farmers to export, of late, Indian exports of food products are facing rejections and bans in key markets on grounds of lack of compliance with food safety and health standards.

Products such as mangoes, table grapes, okra, peanuts, curry leaves, chillies, shrimps, prawns, and tamarind have faced rejections and even bans in markets such as the US, Vietnam, EU, Saudi Arabia, Japan and Bhutan due to issues such as presence of higher than approved levels of chemical residues, and pest and bacterial infestation. In the short run, such rejections and bans can led to financial losses while in the long run, exporters and farmers can lose market share to exporters from other countries, that are able to meet the food safety and health standards of importing countries.

The why of it

A recent study by us (ICRIER Working Paper: 345) showed that Indian agriculture produce face more rejections in key export markets compared to products from other developing countries. Let’s examine one of the largest export markets — the EU, which provides a robust system of reporting the reasons for interception/rejection/withholding of consignments from exporting countries through its risk communication portals — Rapid Alert System for Food and Feed (RASFF) for higher-than-approved levels of chemicals in the produce and European Union Notification System for Plant Health Interceptions (EUROPHYT) for pest infestation.

As shown in the table, between April 1, 2005 and May 31, 2017, Indian exports faced more border rejections compared to exports from countries such as Brazil, and the number of border rejections in proportion to the notifications is highest for India.

Although China has larger number of notifications than India, its volume of exports to the EU is much higher than India’s. Moreover, severe consequences of these notifications such as destruction of consignment were also the highest in the case of India.

Losing edge

Similarly, according to the EUROPHYT portal’s notifications, between 2005 and 2017 (May 31, 2017), Indian exports faced 1,324 interceptions as compared to 452 for Brazil, 602 for China, 114 for Turkey and 922 for Vietnam. A majority of interceptions for India were raised in the years 2012 and 2013, and these pertained to eggplant, mangoes, snake gourd, bitter gourd and taro ( arabi), among others. This led to a ban in entry of mangoes and these vegetables.

While the ban was later lifted, Indian exporters lost their market share in products such as eggplant to exporters from countries such as Kenya. Thus, Indian exports are definitely at a disadvantageous position vis-à-vis their competitors from other developing countries in the EU market. In the US too, 1,698 cases of product refusals from India have been reported by the Food and Drug Administration in its Import Refusal Report from 2014 to May 2017, which is also considered to be very high.

While Indian export control and export promotion bodies are trying to implement traceability, laboratory testing and other measures such as hot water treatment for mangoes to reduce the incidence of rejections, some of these are only temporary solutions and may cause product spoilage. To meet food safety and health standards, India needs to implement Good Agriculture Practices and minimise the use of harmful chemicals in the fields. It is important to focus on food quality and standards in the domestic market, so that products are produced and processed adhering to international food safety requirements.

Raise the bar

Countries such as Cambodia have used international funding and joint capacity building projects to upgrade domestic standards and implement sustainable agriculture practices for products such as rice. The Government has also supported exports through right policies. For example, recently Cambodia’s farm ministry announced a ban on all imports and agricultural pesticides containing tricyclazole, after the EU proposed to lower the maximum residue levels. Such proactive measures by the Government have helped the country become a key exporter of rice.

In spite of being a large producer of milk, India is not able to export milk products and ready-to-eat meals such as palak paneer and ethnic sweets. This ‘Make in India’ initiative is not happening as animals are not reared in proper, hygienic conditions with chemical free feed. India is a ‘high risk’ country in cattle foot-and-mouth disease.

The Government is yet to implement a traceability system for milk and processing conditions are below international norms. In a modern, globalised world, export control reduces the country’s ranking in ease of doing business while traceability improves its acceptability in key markets. Therefore, India should move away from export control to a more scientific system focusing on food safety and health. Such as system can be implemented by FSSAI working closely with the Ministry of Agriculture and Farmer’s Welfare.

Further, with growing consciousness about food safety and health standards even in the domestic market, India needs to focus on food safety and nutritious diet for its own consumers and this will enable to upgrade food safety and health standards from farm to the market.

The writers are professor, research assistant and consultant, respectively, at ICRIER

Published on October 16, 2017

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