Umpteen hindrances, mostly on customs corridors, hold back farm exports like fresh fruits and vegetables and thus blight enormous potential for Bangladesh's export diversification aimed at enhancing foreign-exchange earnings.
Agro-exporters allege both tariff and non-tariff barriers, complexities in customs procedures, mandatory requirement of phytosanitary report and high taxes on packaging materials stand in the way.
Local growers of vegetables, fruits and beetles have said smooth flow of the farm produce is affected for such factors, limiting their market access to other countries, including in Far-east zones. And the potential markets are gradually being grabbed by other export competitors.
However, export earnings from the agricultural commodities registered a nominal 2.28-percent growth in the July-December period of the current financial year, 2023-24.
Producers fear export earnings may not maintain uptrend in the months ahead unless the government takes initiative to clear out the bottlenecks
Following the concerns, the Ministry of Agriculture (MoA) has moved to pursue the different government entities concerned, including the National Board of Revenue (NBR), to resolve tariff barriers.
In two separate letters, the MoA requested the customs authorities to waive taxes, currently up to 53 per cent, on some of the packaging materials, including fruit bag and its raw materials that are needed to wrap the fresh fruits and vegetables at harvesting before export.
The MoA has requested packaging materials of fresh fruits and vegetables to be brought under the tax-incentive packages offered for the agriculture sector.
Currently, country's annual demand for fruit bag is 120 million pieces for packaging mangoes. "Mangos could be kept free from pests using the fruit bags," says a letter sent by MoA, Policy-5 section.
Bangladesh exported around 300 tonnes of mango in the last season, MoA data showed
Apart from the luscious summer fruit, mango, use of fruit bags is also becoming popular for commercial production of guava, banana, lichi, dates and the like, as the bagging helps reduce the use of pesticides that are considered harmful to human health too.
But it is being hampered for import duties as high as 53 per cent, the MoA letter has pointed out.
The Association of Agriculture Products Exporters says there are more complexities in rules along with high tax incidence.
Since August 1, 29023, the customs authority has introduced real -time assessment system on examination of billion export, assessment and export-general -manifest submission.
"Agricultural products are perishable and could not follow the requirement like dry-cargo for various reasons, including banking hours," it says.
The customs could allow 48 hours' time to amend the documents after export shipments of these perishable produce, it adds.
"We have to follow similar rules akin to apparel exporters to measure the goods at customs houses before exporting the perishable items. Customs officials often suspect concealment of actual weight of our goods as it varies just after harvesting and transportation," says Mohammad Monsur, General Secretary of the Bangladesh Fruits, Vegetables and Allied Products Exporters Association (BFVAPEA).
Some seven to eight export-bound containers of fresh vegetables and fruits were recently sent back from Dhaka Customs House for having mismatch in declared and actual weight, he has mentioned.
Bangladesh's agricultural products have a huge market in Malaysia, Singapore, the UAE, which other countries are gradually grabbing in absence of its adequate supply, he told the FE writer.
On taxes, he said the quality of exported vegetables and fruits deteriorates due to use of substandard packaging materials, losing consumer attraction.
There is no production of such packing and packaging materials for fresh fruit and vegetable exports.
Agricultural product exports have been facing hindrances due to deterioration of its quality for using substandard packing and packaging materials.
Local exporters cannot afford exporting those due to high tax on import of the packing materials.
The tax incidence on corrugated fiber board box, foaming box, one-time plastic foaming box (for ready- to -cook products), foaming net for individual fruits and others) is above 50 per cent.
"On e-export, we need at least 24 to 48 hours' time instead of instant finalization rules, issued in August last, as server interruption and technical glitch are frequent in completing the task instantly," he added.
In case of cancelation of export, customs shelved the approval for cancelation, making next export difficult, he said.
The relevant government authorities, including the central bank, customs, and civil aviation, should sit together to resolve the problems,
Bangladesh is in the third position in terms of cropping intensity of vegetables.
Bangladesh cabbages have an enormous market that was proved last year, but after imposition of the phyto-sanitary examination rules, its export declined.
There is no requirement of phyto-sanitary examination report in the Far-east zone, while Bangladesh made it mandatory on its own initiative for all countries, making export complex in those zones, too, Mr Monsur points out as one of the roadblocks.
BSRM Chairman Alihussain Akberali, who has recently invested in Chew Nut industry, says the sector needs some patronage for the time being to attract more investors.
"Local companies would be naturally encouraged to manufacture packaging materials and other supporting materials for exporting agricultural products if demand is created on a large scale," he adds.
Responding to an FE query, a senior customs official said they are yet to be aware of the customs complexities facing agricultural- goods export.
He, however, alleged that "misdeclaration and irregularities" prompt the government to frame the relevant rules.
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