Agro-based industries: Regulatory hindrances and government role By Sayeed Arman

Source: Star ARCHIVE

Bangladesh enjoys a big comparative advantage compared to many other countries in producing and exporting a wide range of agro based products to the world's markets where there is a huge and growing demand for the same. Fertile soil, favourable weather conditions and cheap labour give the local producers a big edge in producing for export markets. The government in recent years declared export-oriented agro-industries as a thrust area although this has not been backed up by adequate support. The steady progression of exports in this sector is encouraging but a great deal more can be achieved both in areas of increasing export volumes and earnings. For this to happen, all stakeholders need to be persuaded of the potentials of the sector and adopt and apply policies with a vision.
A number of export-oriented agro-industries have been doing ground breaking work in this direction. They have contracted with farmers to produce round the year with guaranteed stable prices for their yields. Thus, the motivation of the farmers has remained strong as their earnings have become regular and ensured. More significantly, the farmers have been trained to produce quality products observing the latest health and safety factors. Secondly, the agro-industries have acquired good technologies in the areas of processing and packaging which means not only substantial value-addition to the produces from the fields but also the creation of appeal for the processed and packaged foods among not only Bangladeshi expatriates but also foreign consumers. Thus, from the growing to the consumption stages, some producing and exporting houses here have been successful in ideally building up a value-chain that meets the interests of all the parties involved at different phases.
Export Promotion Bureau (EPB) data says, Bangladesh earned 570 million dollars by exporting agro based products in FY 2012-13. This had risen to 610 million dollars in FY 2013-14. In 2008-09 export of agro based products was worth only 120 million dollars.
Agro-processing has positive impacts on poverty alleviation by creating rural employment enhancing women empowerment and increased farm income. A vibrant agro-processing industry will encourage farmers to produce better quality farm products that will bring higher income for raising the quality of life and living standards. Agro-processing by reducing post harvest loss could have environmental benefits by reducing garbage disposal and pollution problems particularly in the urban areas. So government need to focus its attention in this sector.
Private sector operators like Pran, Square etc. which intend to join the ranks of successful agro-industries with an export dimension need to essentially emulate the methods of the few firms which are there and which have been successful in exporting agro-products. But the new firms should try to do better than the older ones by trying to acquire even more sophisticated technology, innovation in food products and in their packaging. In that case, their attraction will not be limited to only expatriate Bangladeshis as they can expect to gain a wider market access among foreign consumers. Consumers in India, Japan, Europe and North American countries are usually fond of trying out foods catered to them in novel ways. The appeal can be enhanced through packaging and different marketing methods. Thus, the agro-industries here will have to pay attention to these factors right from the start to become successful and retain success over the longer run.
We can reap tremendous economic benefits by processing some farm products.
We have to work out strategies for setting up the agro-processing industry based on regional competitiveness. The soil and environment of entire North West region is highly favourable for producing various kinds of vegetables like potato, tomato, cabbage, cauliflower, brinjal, carrot etc. So, pragmatic steps need to be taken to increase area based production of agro-based products. Through this, even foreign investors will be encouraged to come forward and set up relevant food processing industries.

Wide-scale investment in agribusiness and agro-industry should require the following steps:
* We must develop our agro-processing industries to cope with the challenges by producing international standard processed goods to export abroad. Limitation is here.
* Goal should be optimum output. Farmers should be taught to ensure increased production through latest technology.
* Inadequate core infrastructure like high-tech controlled production facilities, grading, packaging, logistics, warehousing, integrated processing units, transportation and power supply will have to be ensured. Special concessional pricing is needed for gas and oil.
* Insufficient capital for agricultural and agro based industry.
* Unreliable supplies of raw materials in terms of quality and quantity need to be checkmated. Government can give support like in other sectors for importing of machinery and others packaging materials.
* Establish agricultural export processing zone (if feasible).
* Need to develop testing system. Particularly standard of BSTI will have to be of international level. Many times exporters face problem in this regards.
* Government policy and regulatory support are urgent for agro based industry. Related law and order need to updated in an industry friendly way.

Technological aspects of agro-processing industries
* Quality control is measured in terms of standard specifications, codes of practices and good manufacturing practices. The best quality foods are prepared in strictly controlled safe and hygienic conditions at each and every stage of food processing.
* Control of quality of raw materials.
* Control of critical points in the processing.
* Control of finished products.
* The government has to play a major role here. It can set up international standard lab for testing the products quality.
* Government ought to reshape the credit policies for agriculture and allied activities and small scale industries etc.

Problems of financing in agro-business
There has been significant development of agro-business activities in LDCs like Bangladesh. Agro-business in LDCs uses outdated and worn-out tools and bring out inferior quality products.
* Absence of proven entrepreneurs.
* Lack of improved material and technology.
* Absence of long-term national plan.
* Absence of viable marketing or processing structure.
* The lack of marketing infrastructure and the lack of processing and preservation facilities.
* Lack of long term plan of banks and financial institutions.

Problems in exporting
* Transportation cost is high. Also barrier is there.
* Need for building capacity of port, particularly in Benapol, Akhaura, Sutarkandi, Banglaband etc. has been felt for long. India is a big market for Bangladeshi agro based products. So all non-tariff barriers need to be eliminated through government initiatives.

The writer is a journalist and can be reached at sayedarman@gmail.com

Published: 12:00 am Tuesday, March 10, 2015

BSTI or City Corporation, whose law to follow? ByMd. Nazrul Islam

Food production industry suffering

Source: Star ARCHIVE

On one hand we have the standards set by the sole quality control institute of Bangladesh, the Bangladesh Standards and Testing Institution (BSTI), while on the other we have those laid down by the Pure Food Rules, 1967. Because of the discrepancies between these two sets of standards, all involved parties, from the food processors to the distributors and sellers, are facing a dilemma, while the general consumers are left confused.
BSTI determines the quality of different products as the sole quality controller in the country, to distribute qualified products in country's markets. Afterwards, BSTI licenses various institutions to manufacture products according to those standards. BSTI's own team works to check if the products are being manufactured according to the given standards and takes necessary legal action if any deviation is detected.

Besides that, in order to implement the current Pure Food Law, 1967, the City Corporation with the help of government institutes operate mobile courts along with anti-adulteration investigations. There are internal standards for food products in the Pure Food Rules, 1967, which are different from the BSTI standards. Processing falls in trouble due the two types of 'standards' for the same product. For example, in the case of mustard oil, the highest total acid value decided by BSTI is 2 percent, while in the Safe Food Law puts it at is 1.25 percent. During an investigation, the magistrate of the City Corporation takes legal action if he finds that the quantity of acid value is higher than 1.25 percent in mustard oil.
It is widely publicised in the papers when there is an investigation under the Pure Food Law anywhere, or if any lawful measures have been taken against any organisation. There is no doubt that investigations against unauthorised and counterfeit organisations are worthy of admiration. But if dissimilarity lies within the law, then it needs to be redressed.
The situation in the case of different spices is the same. For curry powder, the highest quantity of acid insoluble ash is 1 percent according to BSTI standards and 1.5 percent in the Pure Food Rules. For turmeric powder, the highest quantity of total ash is 7.3 percent according to BSTI standards and 9 percent in the Pure Food Rules. For chilli powder, the lowest quantity of non-volatile ether extract is 15 percent according to BSTI standards and 12 percent in the Pure Food Law. For cumin powder, the highest quantity of Total Ash on dry basis is 7.5 percent according to BSTI standards and 9.5 percent in the Pure Food Law.
Now the question is which law the producers will follow. Will they follow the BSTI standard or the Pure Food Rules standard? For the development of domestic industries, it is of utmost importance to eliminate the confusion created among producers, distributors and the overall clientele due to the two differing sets of standards for the same products within the same country.
As a result of this, confusion is being created amongst the general public and distrust towards domestic products and quality control institutes is on the rise – something nobody wants. So, it is essential to formulate a single 'set of standards' in everyone's best interest.

The writer is an advocate, Dhaka Judge Court and can be reached at nazrul_law@live.com

Published: 12:00 am Tuesday, March 10, 2015

The white revolution By Sohel Parvez

Seventy-nine years ago, Manik Bandopadhyay painted the picture of the strugglesof fishermen in his famous novel,'Boatman of the Padma River.' The struggle for survival and livelihood remains to this day for many fishermen.

But in recent decades, another story unfolded in Bangladesh: a story of fish farmers' endeavours to grow increasing quantity of fish and make fortunes. Some 1.38 crore farmers grow carps, tilapia, pangasius catfish, climbing perch (koi), stinging catfish (shing) and walking catfish (magur) in their ponds and floodplains. Thus they have emerged as the main suppliers of fish to the plates of daily meals of almost all Bangladeshi families.
Farmed fish, which was laggard in the mid 1980s, accounts for 55 percent of the 34.10 lakh tons annual supply of fish in the country. Bangladesh today is the world's fifth largest producer of fish from inland aquaculture.
The journey of aquaculture or fish farming began in the late 1970s with small scale enterprises - mainly fishermen and dominated fisheries. Aquaculture was practised on a low-level, ad-hoc basis.
The scenario began to change gradually after the establishment of the aquaculture experiment station in the northeast district of Mymensingh and the government's program of establishing over 100 fish hatcheries throughout the country, based on World Bank finance.
Other donors and lending agencies also came forward to finance the aquaculture development.
In one estimate, 10 major donors spent or committed USD 317 million in grants or loans to develop aquaculture in Bangladesh between the year 1985 and 2005.

As a result of these initiatives, the private sector came onto the stage in the 1990s and established many carp hatcheries, nurseries and aquaculture farms initially in Jessore, Bogra, Mymensingh and Comilla districts. Later fish farming expanded in other parts of the country, partly because of farmer-to-farmer transmission of knowledge on farming.
Today, in fish cluster areas, including greater Mymensingh and the northwest, various types of finfish are farmed almost throughout the country thanks to the increasing availability of fish fingerlings from 936 fish hatcheries.
Ponds, a common picture in rural and suburban areas of Bangladesh, dominate aquaculture followed by flood plains with carps accounting for 88 percent of the fish recorded as produced in ponds in Bangladesh.
Such a rapid expansion of aquaculture has also changed the composition of the country's fish production basket. Fish captured from inland open water bodies, rivers and canals, which were once the main source of the supply, has declined overtime.
What now?
The rapid expansion of fish farming and increasing production have contributed to increased fish consumption, not only among fish producers but also consumers, including poor and working class people who have got better access to animal protein because of declining prices in the last decades.
Daily per capita consumption of fish is now 49.5 grams in Bangladesh. During 1991-92, it was 34.5 grams. Fish today accounts for 56 percent of total animal protein intake in Bangladesh.
Although expansion of aquaculture has resulted in higher benefits for better-off landowners and wealthy investors, it has also created jobs for many low, mid-income and landless people across the fish value chain, ranging from hatcheries, nurseries, fish farming to marketing in urban areas.
Commercial aquaculture is now one of the main economic activities in many fish farming zones. Increasing production of farmed fish has also facilitated Bangladesh to attain near self sufficiency in fish. Only around two percent of domestic demand for fish is met by imports mainly from neighbouring Myanmar and these imported fishes are destined primarily for the restaurant trade.
However, farmers, especially small farmers, are yet to reap full benefits of production for their lack of control in marketing where fish traders dominate and enjoy the lion's share of the profits. One study finds that profits made by fish traders may appear to be high - ranging from 30 to 45 percent of the consumer price. Livelihoods of small actors have not improved much.
One point to note is that the expansion of aquaculture has brought about a change in social attitude. Once fishermen were usually ranked very low in the social hierarchy. That perception has changed due to the expansion of export-oriented shrimp farming and fresh water aquaculture. People engaged in aquaculture farming are no longer treated as lower classes in society.
Quality and safety
Concern remains regarding quality of fry for farming and the safety of fish at consumer's end. Recent studies find that poor quality fry, increased disease and mortality, inbreeding and hybridisation problem remain as major concern for fish farmers.
However, attempts to improve the quality of fry, especially carps that suffer from inbreeding and hybridisation, remain limited. A couple of years ago, the government framed laws for fish hatcheries and feed to ensure their quality. The Department of Fisheries aims to bring all hatcheries under its registration.
The marketing infrastructure for fish is also weak. There is inadequacy of cold storage, ice and facilities to transport fish from farmers' ponds to kitchen markets in urban areas. There is no standard practice for handling, washing, sorting, grading, cleaning and icing of fish while retail markets are unhygienic and in poor condition in most cases. In addition, use of toxic chemical formalin to increase shelf life has also raised serious public health concerns.
In absence of availability of insulated styrofoam boxes and high prices of ice, traders have allegedly been using relatively cheaper formalin in carps and in various local fishes to increase shelf life and avoid the risk of losses for spoilage in the supply chain up to the consumers. As a result, many people suffer from illnesses due to the consumption of unsafe fish. But the government's efforts to ensure people get safe fish remains a far cry although there are a host of laws, including the latest Safe Food Act, 2013, to ensure food safety.
While testing of fish is not usually done to check quality of fish marketed locally, it is done at government laboratories to monitor the fish quality for export markets, indicating that the government is less bothered about the domestic market and consumers. The testing of domestically marketed fish has so far been confined to formalin detection.
Studies also find that these laboratories do not have facilities for microbiology tests for organophosphorus (OP) and organochlorine (OC) pesticides. The Chittagong laboratory is the only one that has facilities for testing for heavy metals.
At what cost?
In addition to concerns about the safety and quality of fish, the increased fish farming has a cost: almost all expansion of commercial aquaculture took place on lands formerly used for paddy cultivation.
Lands, especially in some areas of Mymensigh region, are converted to ponds either by owners or by renters. No paddy is grown on such lands owing to the construction of ponds.
Aquaculture on flood plains, has also reduced fishermen's access and traditional foraging activities such as subsistence fishing. It has narrowed down the opportunities of nutritional aspects for poor households. There are also some concerns as to the implications of the impoundment of water and the stocking of non-native fish species on biodiversity. Pollution such as salinity from shrimp farms, antibiotics in feeds, discharge of nutrients also becomes a matter of worry.
Culture of exotic piranha, which was introduced in the 1990s into Bangladesh and was later banned for containing poisons, still exists. Culture of another banned exotic fish, the African magur, has also been going on despite a ban. These are marketed openly in many parts of the country.
Looking forward
Various studies and international organisations forecast that economic growth, rising income, population growth and urbanisation will fuel demand for fishin the coming years. At the same time, consumers will increasingly demand safe food. Food and Agriculture Organisation says Asian countries are expected to account for 91 percent of world aquaculture production in 2022, with Bangladesh, Thailand, India and China experiencing the highest growth rates.
But too much focus on increasing production can undermine the importance of improving the whole value chain and ensure supply of safe fish to commoners. Without ensuring safety and quality, the long-cherished goal of becoming a healthy nation will be at stake.
So, it is time to ensure governance and good practices in aquaculture so that commoners get safe food, a dream of the country's nearly 16 crore population today.


The writer is a senior business reporter, The Daily Star.

Published: 12:00 am Tuesday, March 10, 2015