India sees wide scope for rice-seed trade with Bangladesh

The Daily Star, Dhaka, 15 May, 2013

Analysts say political commitment from both Bangladesh and India will improve bilateral trade in rice seeds

A seminar on addressing the barriers to rice seed trade between India and Bangladesh raised an important issue; if China could export rice seeds to Bangladesh, why can’t India? Bangladesh is a net rice seed importer with an estimated market size of $5.9 million in fiscal 2010-11, while India is a net exporter of the product with an exhibited export capacity of $17.3 million in 2011. But India’s export to Bangladesh remains negligible at less than 3 percent of its total rice seed exports. Experts and policymakers tried to identify the bottlenecks at the project launch organised by CUTS International, an NGO, and funded by Bill and Melinda Gates Foundations. The discussion was held in Kolkata last month.

“Farmers in Bangladesh are more concerned with rice yield than the quality of grains,” said Sudhir Chandra Nath, head of agriculture and food security programme at BRAC. Nath said there is scope for rice seed trade between the two nations. He wants India to be reciprocal.
“Bangladesh is good at production of boro variety (BIRI28/29), India is good at aman variety (Swarna),” he said. To improve bilateral trade in rice seed, there is a need for political commitment from both ends, he said.

Dr Sushil Pandey, former consultant of Manila-based International Rice Research Institute, emphasised two issues — uniqueness and comparative advantage — that influence trade. “The review done so far confirms the comparative advantage,” said Pandey.

Bipul Chatterjee, deputy executive director of CUTS International, said there is a potential for rice seed trade between the two countries, but it is not happening.

Chatterjee said Bangladesh’s per unit import cost from India is much lower than that from other nations. In 2007, price of Indian exports was $0.16 a kilogram, while Bangladesh’s import price was $1.59 a kilogram, said Chatterjee.

Despite a huge comparative advantage in price, India cannot export rice seed to Bangladesh. “Perhaps, the on-going informal trade is a barrier in this regard,” said Chatterjee. Regulatory challenges may be the other area of concern, he added.

He said the project will analyse and identify the problems and also understand the issues and challenges of the stakeholders involved in the supply chain. The seminar did not discuss overall bilateral trade, or the opportunities and challenges that the neighbours face. Two-way trade stood at $5.242 billion in fiscal 2011-12 with India’s exports to Bangladesh accounting for $4.743 billion and imports $498 million.

Some of Bangladesh’s imports from India include cotton, vehicles and parts, cereals, animal feed, boilers, machineries, iron and steel, mineral fuels, chemicals, vegetables, jute seeds. In addition, Bangladesh imports 80 percent of its jute seed requirement from India. Yet, one item — rice seed — is not on Bangladesh’s import list that has concerned analysts in India.

“I find no reason for India to be concerned about rice seed exports to Bangladesh as it already imports so much from them,” said a Bangladeshi participant requesting anonymity. Bangladesh’s annual demand for rice seeds is estimated at 350,000 to 400,000 tonnes. Of this, the country imports only around 7,000 tonnes, mostly hybrid seeds, from China. Bangladesh also imports a small amount of seeds from Thailand and the Philippines.

According to Nath of BRAC, rice yield in China is 6 tonnes a hectare, which is 3.5 tonnes in Bangladesh. “Indian yield is lower compared to China,” said Nath. But India’s Swarna variety has a yield of 3.5 to 4 tonnes a hectare, he said. Moreover, Chinese experts stay in Bangladesh to help farmers, from cultivation to harvesting, he added.

Abida Islam, deputy high commissioner of Bangladesh to Kolkata, also addressed a session at the two-day seminar. Bilateral cooperation between the two countries is very important amid the challenges of climate change and food security, she said.
Political and regulatory barriers to rice seed trade needs to be addressed, which might help in formalisation of the informal trade taking place due to some known and some unknown factors, he added.

Chatterjee said the project will be completed in one and a half years. Later, the recommendations based on the findings would be sent to both the governments.

This news item can also be viewed at: