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Agri export sector bats for freight support

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NEW DELHI : Amid soaring international and domestic transport costs owing to the Russia-Ukraine war, exporters of agricultural commodities have asked the central government to reinstate the Transport and Marketing Assistance (TMA) scheme which had an allocation for ₹200 crore.

The scheme was beneficial for low-value agri products, especially vegetables. Exporters said that often, air freight rates are higher than the cost of vegetables, and a 200-600% jump in freight rates in the last two years has worsened the situation.

Federation of Indian Export Organizations (FIEO) has said that withdrawal of TMA scheme has come as a “setback” for agri exporters and that small businesses have had to bear the brunt of the same.

Seeking a quick roll-out of the revised TMA scheme which had an allocation of nearly ₹150-200 crore, FIEO asked the cover to be given from 1 April 2021 as many exporters had factored in the freight benefits while finalizing the contracts.

However, a government official said the scheme has been stuck due to shortage of funds.

“The scheme was stopped because of a shortage of funds. Until fresh allocation is made, the scheme cannot be rolled out and no fresh allocation has been made as yet,” the official said on condition of anonymity.

Amid the surge in demand for agricultural commodities, India’s agri exports crossed $50 billion in FY22, the highest ever. However, exporters said high freight rates are affecting profitability.

“Neither the buyers nor the consumers are absorbing the entire increase in freight and therefore, the exporter is at a loss,” FIEO DG Ajay Sahai said.

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