TDAP asked to ease SME rice exporters businessFebruary 18, 2014
KARACHI: Union of Small and Medium Enterprises (UNISAME) urged the Trade Development Authority of Pakistan (TDAP) to take notice of the difficulties of the SME rice exporters and make efforts to enhance rice exports and make doing business easy for the SME rice exporters.
President UNISAME Zulfikar Thaver said besides terrible law and order situation, unannounced load shedding, irregular supply of water and low gas supplies to the SME units the SME rice exporters and processors are facing a hard time. The rice exporters expect TDAP to take measures and connect with the finance ministry to enhance exports and save the rice industry.
This year the yield per acre is less than last year due to late water supply. The SME farmers are complaining of increasing cost of inputs and logistics which is increasing prices due to less supplies and heavy cost of production. All this is adversely affecting the rice exporters.
The exporters are complaining that the commercial banks are not negotiating and discounting letter of credits of exports to third world countries and low rating banks making it very difficult for the rice exporters who have orders in hand but cannot export as banks are not inclined to negotiate bills drawn on the banks of third world countries or the buyers. In many cases the banks have low rating but the buyer is very sound yet the banks are reluctant. To overcome this the State Bank of Pakistan has to cover the country risk and indemnify the banks against default by virtue of the export credit guarantee insurance as done in other countries of the world.
The much talked about currency swap agreement (CSA) with neighbouring countries is shelved .The rice sector needs a full fledged CSA with Iran, Turkey, Afghanistan to promote bilateral trade. The exports to Iran are likely to reopen due to improvement in relations with the USA but for free trade it is important that a CSA is in place.
Our competitor India is getting bigger market share due to our lethargy in decision making. We need to be proactive rather than react as we have lost our traditional buyers due to delayed action or no action.
The TDAP needs to hold regular fairs & exhibitions especially to promote Pakistani rice globally by highlighting the features of our rice.
The Quality Review Committee (QRC) is another hindrance and needs to be dissolved as it is no more required due to the exports by the shippers in their own brands. There are no restrictions in India for rice exporters. QRC was formed to protect basmati label but unfortunately India prevailed and got a major portion of the geographical indications (GI) in their favour and QRC obstructed exports irrationally.
The TDAP needs to file an amendment with the GI registry for inclusion of omitted basmati growing areas.
“The withholding tax on exports of rice needs to be reduced to 0.5 % to make our exports competitive. Farm inputs need to be exempted from duties and taxes to reduce cost of production. Rice processing machinery and packing materials needs to be exempted from duty to encourage modernization of rice processing units.”
Thaver said the TDAP was duty bound to look into the hurdles and make efforts to resolve the issues besides taking up the matter with the ministry of commerce, finance and agriculture to make them consider the difficulties and adopt measures at the earliest.