Bangladesh's fruit-processing industry is going through a difficult time because export incentives have been cut, production costs have risen, loans carry high interest and raw materials have become more expensive, says Md Abul Hashem, managing director of Hashem Foods Limited.

In his view, Bangladesh's position in the international market will weaken further unless there is policy support and competitive incentives.

He was speaking at a roundtable titled "Fruit Processing: Problems and Prospects", moderated by Jago News editor K M Ziaul Haque, on the morning of Saturday, 27 June.

"Bangladesh is called an agriculture-based country, but the farm sector is still not getting the support it needs," Md Abul Hashem said. "Mango juice in particular costs so much to produce and export that it has become hard to compete in the international market."

The export incentive used to be 20 per cent but has now been cut to 10 per cent, he said. "At the same time, our transport costs are much higher than Pakistan's and India's. Sugar in Bangladesh costs almost 50 per cent more than in India. Apart from mango pulp, almost all raw materials are imported, which pushes production costs even higher."

In the past, part of the extra cost could be offset through the export incentive, he said. With the incentive reduced, exports of almost every kind of processed farm product, not only juice, are suffering.

"If these incentives stop altogether once Bangladesh graduates from the least developed country (LDC) list, exports may fall further," he said. He added that processors want to keep exporting despite all the difficulties, but need effective government support to do so.

Drawing on his experience with his own mango orchard, Hashem said: "At present, the sale price often does not cover the cost of growing mangoes. If farmers and agro-processing entrepreneurs cannot make a profit, the sector cannot survive."

Mexican mangoes sell widely in the United States, he said, although Bangladeshi mangoes taste much better. "Because production and export costs are high, we cannot use that potential. Traders are not making the profit they expect even when they export mangoes."

Urging the government to ensure a profitable environment for entrepreneurs, he said: "In India, fruit growers and the agro-processing industry get various incentives and support, so their production costs stay low. Bangladesh needs similar policy support."

He stressed training farmers to make farm produce safe and fit for export. "Pesticides are used in every country. But many farmers do not know the correct dose and apply too much, which is a risk to public health on one hand and a major barrier to exports on the other."

Hashem said large nuts, which are in good demand internationally, could be produced by developing improved varieties, and that cashew and other nuts, and their processing, also hold great potential.

Calling for easy finance for small and medium enterprises (SMEs), he said: "The SME sector must be strengthened to drive industrialisation. But with loans at 14 to 15 per cent interest, it is hard for any industry to stay competitive. Neighbouring countries have lower interest rates and give entrepreneurs tax benefits."

Interest rates in Bangladesh are this high and there are no tax benefits either, he said, asking how new industries could grow in such conditions.

Others at the roundtable were researcher and agricultural economist Dr Jahangir Alam Khan, former vice-chancellor of the University of Global Village; Dr Md Golam Ferdous Chowdhury, chief scientific officer of the Postharvest Technology Division of the Bangladesh Agricultural Research Institute (BARI); fruit expert Dr Md Mehedi Masud, former project director of the Year-round Fruit Production project; Mohammad Arifur Rahman, director of the Department of Agricultural Extension's exportable mango production project; Enamul Haque, deputy director (food and agriculture) of BSTI; Eliyas Mridha, managing director of PRAN Group; Md Iktadul Haque, former general secretary of the Bangladesh Agro-Processors' Association (BAPA); S M Nazer Hossain, vice-president of CAB; Md Mahatab Ali, executive director of Kaju and Coffee Agro; Chapainawabganj agri-entrepreneur Ismail Khan Shamim; and Naogaon agri-entrepreneur Sohel Rana.

Source: Jagonews24. First published in Bengali on The Agro News.