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Grape export subsidy withdrawal leaves a sour taste

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MUMBAI : Grape export from Maharashtra is likely to witness a decline this year with the Union government withdrawing the subsidy for outbound shipment of the popular fruit,

according to industry representatives. Maharashtra is the largest producer and exporter of grapes in the country with Nashik district being its biggest production centre. The district in North Maharashtra, located around 200 km from Mumbai, is often called the “grape capital of India”.

There are some blocks in Sangli, Satara and a handful of other districts in the state that grow grapes, but most of the export takes place from Nashik.

Grape growers in the state are not happy with the decision to withdraw the export subsidy and have raised the issue with the central government.

A delegation of the Maharashtra State Grape Growers’ Association (MSGGA), the apex body of grape farmers, recently submitted a representation listing their demands to Union Minister of State for Health and Family Welfare Dr Bharati Pawar, who is also a Lok Sabha member from Nashik district.

Ravindra Nimse, Nashik Divisional Chairman of MSGGA, said, “The Union government has stopped the subsidy for grape export, which will directly affect our incomes and profit margins.”

He said the subsidy was withdrawn in January this year.

“The transport and marketing subsidy was Rs 40,000 per container of grape, which was later increased to Rs 60,000. At the same time, transportation charges for the UK or the European Union were USD 1,800 per container which later increased to USD 4,000. Now, it is USD 7,500, but the government has withdrawn the subsidy,” Nimse said.

He said the Centre’s move will adversely affect overseas shipment of the fruit which can be eaten fresh, in dried form or can be used for making wine, jam, juice, vinegar and oil among other products.

“It is becoming impossible for us to export grapes. We need at least Rs 1,50,000 subsidy per container so that we can compete in the international market,” said the office-bearer of the state’s apex body of grape farmers.

Nashik district produces around 1,400 tonnes of exportable grapes every year. Although, all the containers are supplied to the Netherlands, the produce is later distributed across European Union (EU) countries.

A senior government official in the state agriculture and marketing department said, “The produce we export to EU countries attracts eight per cent import duty. However, the same produce coming from South Africa, Chile and Peru to the EU and the UK does not attract same level of import duty. This makes our (Indian) produce costlier (in the global market).”

Grape production is a major business for many Nashik farmers and it plays a significant role in sustaining the economy of the region.

In the last few years, farmers have been cultivating grape varieties that are in good demand in the foreign market.

Grape growers and exporters are also facing the challenge of arriving at the minimum support price for export quality produce.

Exporters such as MSGGA calculate input cost and arrive at a price by including 10 per cent profit of farmers – which is their selling price.

However, if export price becomes unsuitable, many of the farmers will prefer to sell the produce in the local market at lower rates, said a member of the apex association.

If problems faced by grape growers are not resolved in time, many of them may not enlist themselves for export this year, resulting in lower shipment for the overseas market, the member said.

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