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Bhutan cardamom exports to India set to resume soon

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A worker at a cardamom depot in Chukha district’s Phuntsholing town in Bhutan. KUENSEL

Bhutan cardamom exports to India set to resume soon

Exports of Bhutan’s cardamom to India are set to resume in the coming days. This was after the government of India officially identified an additional trade route on December 27.

Bhutan’s Minister for Agriculture and Forests Yeshey Penjor announced this during the Friday Meet last week. Yeshey Penjor said the issue was discussed during several bilateral talks, but it took some time to identify and recognise entry points. “Soon after the government was formed we pushed on that and had several meetings with Indian government officials where we discussed the issue,” he said.

The ministry will notify exporters and border officials to communicate the decision to the counterpart in India and establish the procedure. “So, within a few days, export can resume,” Yeshey Penjor said.

A complete stop

Export of cardamom to India was affected after the Indian Goods and Services Tax (GST) commenced on July 1, 2017. Starting November 28, cardamom export to India had come to a complete stop. This comes after the implementation of GST had the customs offices install the computerised system called Icegate in Jaigaon and other border towns that link trade to Bhutan.

The halt was due to the failure to include the four exit points from Bhutan to India as points of entry for import of plants and plant materials.

The ministry was exploring two options to address the issue with the cardamom export.

The government recently decided to buy back cardamom stock from farmers at 550 ngultrum ($7.89) per kg. Yeshey Penjor said the government came up with a temporary measure to address the issue and was almost ready with the buyback arrangement, but there was a small issue.

Initially, it was estimated that there were about 760 tonnes of cardamom with farmers and exporters. But farmers had stock from 2013, which cannot be exported.

“We need to grade the goods to obtain good value in export. So, the government decided to go for the highest buyback price that is 550 ngultrum per kg,” Yeshey Penjor said. “When we go for the highest price, there is a guideline to screen the quality of the products. When we do that, about 380 tonnes of the 760 tonnes were still with the farmers.”

Yeshey Penjor said that all the stock with the farmers were not from last year. “After the screening, farmers were reluctant to declare this year’s [2018] produce which indicates that some farmers do not have 2018’s produce. Some farmers with huge quantity were reluctant to share the exact quantity.”

The minister said it delayed district agriculture officers from obtaining actual quantity figures. “If we get the actual quantity then we multiply it with Nu 550 and then request the finance ministry to release the money.”

He said export is a long-term and sustainable opportunity whereas the buyback is a temporary measure to encourage farmers to continue with their farming practices. “If the produce could not be sold or if it goes wasted, they would be discouraged to continue farming. This will hamper the country’s goal to achieve food security and self-sufficiency.

“When we took two measures together, the long-term one came earlier, which is fortunate.”

The minister also pointed out the lack of value addition to the produce to fetch a better price. “For the long term, the government also needs to invest in putting in place value addition mechanisms.”

Meanwhile, Yeshey Penjor said the government is also exploring the market for export of agricultural produce including cardamom outside of India. But it is expected to take one or two years.

“We have already requested the foreign ministry to instruct embassies to explore the market for our agricultural produce,” he said. KUENSEL/ANN

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