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G. Chandrashekhar

MUMBAI, May 27

ALTHOUGH the Government continues to swear by economic reforms and freedom to trade, restrictions still stymie agricultural commodity exports. Export of nigerseed is a classic example of how bureaucratic stranglehold hurts exports and exporters.

India is an important producer and supplier of nigerseed — an oilseed of limited utility here — to the world market where it is used as bird feed. But the country's dominant position has stood gradually eroded in recent years because of unseemly impediments to export promotion, allege private traders.

To start with, the export policy for nigerseed is far from simple. Nigerseed export is canalised or channelled through Tribal Marketing Cooperative Federation (Trifed).

The canalising agency has in turn appointed some Government parastatals such as National Agricultural Cooperative Marketing Federation (Nafed), National Dairy Development Board (NDDB) and specified State-level federations as associate shippers.

Private trade is allowed to undertake exports provided traders become registered exporters either with the canalising agency or with one of the associate shippers. This is not all. All export contracts for destinations other than the US have to be registered with the canalising agency Trifed, while contracts for export to the US may be registered with associate shippers.

The last Exim policy announced on March 31 has specifically laid down that service charges of 2.5 per cent are payable by private exporters (down from 5 per cent levied earlier). However, even 6-7 weeks after the new policy came into operation, Trifed and its associate shippers continue to charge the higher rate, allege exporters.

The interesting feature of the nigerseed export fiasco of recent years is that the export policy has not benefited anyone, including tribals, who were supposed to be the beneficiaries of the restricted export policy.

As a matter of fact, nigerseed production in the country declined by half in the last four years to about one lakh tonnes and the country's share in the world trade has declined from around 70-80 per cent to 50 per cent now.

Several private exporters Business Line spoke to expressed concern over unnecessary complexities in export of nigerseed. ``It makes little commercial sense to have a complicated export policy and procedure for nigerseed. Exports should be completely free,'' said Mr Sanjay Shah, partner of Premji Ghellabhai and Co, a private exporter.

``Ten years after the country embarked on economic liberalisation and two years after quantitative restrictions on foreign trade were removed, our agricultural commodity exports are not totally free,'' lamented another exporter.

Currently, export quotes for the commodity are said to be around $630-640 a tonne f.o.b. India ships out about 25,000 tonnes of nigerseed a year, while the world market size for this birdfeed material is estimated to be around 50,000 tonnes. ``India will soon be edged out of the market by other origins if we do not remove export restrictions,'' said Mr Shah.

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