The Telegraph
Monday , November 12 , 2012
Since 1st March, 1999
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Dhaka seeks access to farm market

New Delhi, Nov. 11: Bangladesh is looking to sell its surplus farm produce to India, one of Asia’s biggest buyers.

The eastern neighbour wants to take advantage of new trade benefits to sell its surplus potatoes, vegetables and flowers, Matia Chowdhury, Bangladesh’s agriculture minister, told The Telegraph.

Bangladesh produces about 8 million tonnes of potatoes, 3 million tonnes of vegetables and 4,000 tonnes of major flowers.

Nearly a third of the country’s vegetables perish as does a sixth of its potato crop, while lack of storage forces growers to often sell flowers at one-tenth of the price in India.

“An agriculture export thrust will be made… the government can act as a catalyst… actual sales will have to be through private traders,” said Chowdhury, who was in India at the invitation of the Indian government to discuss farm co-operation, river water sharing and bilateral political relations.

Bangladesh, which till recently imported rice from India, is now self-sufficient with production likely to touch 32 million tonnes by the end of this year.

Though India produces about 17 per cent of the world’s vegetables, rising income and changes in food demand pattern have led to shortages, pushing up prices by 15-50 per cent.

Analysts say farm supply from western Bangladesh to nearby markets in Calcutta and even further west in Delhi or Mumbai can benefit both countries.

New rules notified last year lets India’s neighbours Bangladesh, Afghanistan, Nepal, Bhutan and Maldives sell goods — where local value addition is over 40 per cent — free of duty to the $1.7-trillion market. The rules do not apply for except liquor, wine and tobacco.

India’s two-way trade with Bangladesh is about $5 billion, but with a surplus of $4.5 billion in favour of India.

Sujay Nag, former country head of Tata International in Bangladesh, said, “In western Bangladesh, large quantities of green vegetables, fish and flowers are thrown away as there aren’t enough buyers… tuberose sells for Rs 4 a dozen there, while it sells for Rs 24 a dozen in Calcutta, which is just 80-90km from the flower growing centre of Jessore.”

“Natural markets and hinterland for farm produce which were disturbed by partition can be reunited by encouraging this trade,” said Nag.

Tech support

The Bangladesh delegation, led by Chowdhury, also negotiated deals to get drought resistant and saline tolerant foodgrain seed technology from India.

Chowdhury also said “Bangladesh was open to the idea of foreign direct investment in food-processing”.

India has invested about $600 million in its neighbour. More big-ticket investments are in the pipeline, such as in power. NTPC has signed deals which can bring in $1.5 billion into Bangladesh. India’s Marico has plans to invest about Rs 30-40 crore in personal care and food processing.