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Aiding exports by removing trade distortion in global market.


Date: 05-10-2009
Subject: Aiding exports by removing trade distortion in global market
 Banana is no humble fruit. It is one of world’s important food crops grown mainly in developing economies (mainly India, China, Brazil, Ecuador and the Philippines) and the size of international trade in this popular fruit is as large as 16-18 million tonnes (mt), supplied mainly from Latin American countries and the Caribbean. Major importing destinations are European Union, the United States and Japan. Given the size of production and market, it is not surprising t hat banana and processed products provide large employment and income opportunity for several millions around the world.

India has the distinction of being the world’s largest banana producer – about 15-16 mt (a fourth of global output). The fruit is amenable to various soil conditions. No wonder, Maharashtra, Tamil Nadu, Gujarat, Assam, Karnataka, Kerala, Bihar, West Bengal, Andhra Pradesh, Orissa and Madhya Pradesh are major producers.

Agriculture Ministry statistics show in 2006-07 banana was cultivated on nearly 4.6 lakh hectares and production was at a record 159 lakh tonnes withan average yield of a little over 34 tonnes a hectare, another high.

NATURAL ADVANTAGE

According to experts, India enjoys a natural competitive advantage in terms of ecology, productivity and cost of production. However, there are issues relating to lack of quality standardisation, huge post-harvest losses and fruit quality being inappropriate for processing. Obviously, lack of certified high quality planting material stymies promotional efforts.

Adoption of tissue culture techniques is the way forward. Already growers in States such as Tamil Nadu are quick to adopt tissue culture banana cultivation. Experts point out that with an initial investment of Rs 80,000-85,000 a hectare, growers could obtain yields of 38-40 tonnes which can fetch Rs1,50,000 to Rs 1,60,000 gross income and a net income of Rs 70,000-Rs 75,000 a hectare annually.

BIGGEST CHALLENGE

One of the biggest challenges for horticulture in general and banana in particular is huge post-harvest losses because of inadequate infrastructure.With investment flowing into horticulture sector, thanks to initiatives of the National Horticulture Mission and other agencies, farm yields have beenrising gradually. Reduction in post-harvest losses through adoption of appropriate post-harvest practices and technologies can help reduce costs and make Indian banana more competitive.

The market for value-added products is expanding rapidly. Banana chips are one ready example. Other products include banana powder, banana flour, banana puree, banana jam and jelly, banana vinegar and sweet coat banana. Most parts of banana tree including its trunk are useful.

Banana exports too have a potential; but the world market is currently distorted because of quotas and preferences. If these distortions caused by discriminatory duties are removed (some select origins enjoy favourable or zero duty), Indian banana may become more competitive. There is a huge domestic market waiting to be tapped though.

Source : Business Line

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