Constraints on Karnataka's farm export potential identified

By S.K. Ramoo

BANGALORE, FEB. 23. Karnataka has emerged as a pioneer State, following the establishment of a cell by the Government to study the provisions of the WTO agreement and its implications on agriculture and horticulture in the State.

The cell, headed by Dr. Prem Nath, a former Assistant Director General of the Food and Agriculture Organisation (FAO), in its recent report submitted to the Government, identified numerous constraints on the export of agricultural and horticultural products.

It made important recommendations for rendering Karnataka export- competitive and felt that in order to step up the State's exports in agriculture and horticulture, an incentive mechanism, improved infrastructure facilities and removal of transport bottlenecks were imperative.

It pointed out that Karnataka enjoyed an advantage in agriculture and horticulture and in their processed products, floriculture and forest produce. It drew attention to the built- in-cost disadvantage owing to inadequate infrastructure and administrative bottlenecks. This necessitated putting in place an incentive arrangement for the reduction of pre-export and post- harvest expenditure. Due to heavy overheads, exporters from the State were finding it hard to compete with others from outside. The cell recommended establishment of export promotion zones in Bijapur, Chitradurga and Kolar districts and suggested waiver of the one per cent Agriculture Produce Market Committee Cess for exporters to derive the cost benefit. It wanted the Government to take advantage of the Centre's Backward Area Development Exemption for creating infrastructure in the north Karnataka districts for tapping their horticulture export potential.

It recommended immediate establishment of farmers' export consortium for bringing together farmers with small quantities of export surpluses on the lines of the grape cooperatives. Such a measure would help in spreading export trade culture among small farmers. An insurance cover for export- oriented producers would effectively protect them against domestic volatile price fluctuations. It felt that Karnataka should participate in international agriculture and horticulture exhibitions to know first hand the global demands and market trends.

Listing the numerous constraints, the cell recommended creation of raw material growth centres for prompt and uninterrupted supply of raw materials to export houses. Infrastructure bottlenecks such as non-availability of water, stable and quality power, well-laid roads and harvesting facilities, besides bureaucratic hurdles should be removed on priority basis.

It pointed out that frequent tripping of power and poor quality of its supply often compelled exporters to opt for captive generation, which added to the built-in costs of manufacture. The existing communication gap between the world market and local exporters should be bridged on a priority basis. The cell said 90 per cent of Karnataka's mango production was diverted to Andhra Pradesh and Tamil Nadu for processing for the export market and wanted urgent measures to be adopted to enable the State to derive the benefits of value- addition.

It wanted early commissioning of the planned international airport at Devanahalli, speedy development of the Mangalore and Karwar seaports, setting up of economic zones and identification of exportable non-traditional items. It recommended introduction of contract farming by pooling the small and marginal farmers to enable the Government to safeguard their interests.

The cell said special attention should be paid to the production, market channeling and processing of maize, groundnut, niger seeds, chillies, mango, pomegranate, grape, lime, flowers, gherkins, cashew, onion, potato and vegetable seeds. The interests of the growers of the Bangalore Rose Onion, meant exclusively for export, should be fully safeguarded. The Government should put in place a set of environmental safeguards as intense global competition may lead to adverse impact on the State's bio-diversity, it said and pointed out that Karnataka enjoyed natural advantages in the trade of poultry, pork, milk, milk products, mushroom, honey and vanilla.

The cell suggested establishment of a nodal agency for effectively monitoring the State's role in international trade and said special attention should be paid to the high-value specialised crop sector for export promotion. Remedial measures should be taken to protect the spice derivative industry currently facing non-tariff barriers. It cautioned that the Indian coffee industry was likely to face orchratoxin contamination and wanted steps to be taken to protect the environmentally-fragile north Karnataka districts. R and D investment in the farm sector should be enhanced to boost the State's agriculture and horticulture exports, the cell said.

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