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Seafood Sector

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April 14, 2017

What is the issue?

In a setback to seafood exports, big importers like the European Union, South Africa and the US have stepped up testing measures for marine product consignments shipped from India.

What is the current scenario of seafood farming?

  • India is the second largest aquaculture producer in the world after China.
  • Aquaculture has emerged as one of the fastest growing sectors in India primarily driven by shrimp exports to high value markets with only about 10% shrimp production being consumed domestically.
  • But, with increasing adoption of product quality standards, especially with respect to health and safety, the occurrences of Indian shrimp shipments failing to meet these standards are becoming common.

What are the impacts due to rejection?

  • Shipments are now frequently being tested for antibiotic residue and contaminated shipments are rejected and shipped back at significant costs.
  • These shipment rejections could cost the Indian industry significantly, with business going to competitor countries that are able to offer assurances for the safety and quality.
  • Apart from the direct financial impact, there are reputational risks due to the nature of the export market, with the likes of countries such as Vietnam vying for a share of lucrative western markets.
  • So, it is becoming increasingly essential to adhere to best industrial practices that avoid a series of such challenges and create opportunities for growth and differentiation in seafood market.

What could be done?

  • An approach that is increasingly being used around the globe is the use of sustainability standards and certifications such as MSC (Marine Stewardship Council) or ASC (Aquaculture Stewardship Council) as a way to assure buyers of the safety, quality and environmental responsibility of their products.
  • These are essentially parameters that ensure that the capture or farming of seafood is done in an environmentally, socially and economically responsible manner.
  • Most of these standards have been conceptualised with inputs from key stakeholders in the industry, including producers, processors, academia and other relevant parties.
  • For shrimp exporters, the ASC standard is the leading aquaculture sustainability standard at a global level, with ASC-certified products being preferred by buyers in the EU and North America.
  • ASC enables the traceability of the seafood in question through a concept known as ‘chain of custody’ where every link in the supply chain is certified.
  • This allows end consumers to know where the seafood comes from and assures them that their consumption is not impacting the environment or society in a detrimental manner.
  • It also includes clearly defined indicators that restrict the usage of antibiotics, chemicals and fungicides in farming operations.
  • The seafood produced by ASC-certified farms is compliant with most international health and safety regulations and is widely accepted.

What could be the potential benefits?

  • Indian exporters can get more value and returns on their investment by exporting to these countries directly.
  • ASC along with other standards such as BAP (Best Aquaculture Practices) can help exporters move up the value chain by enabling access to higher value destinations, given the increasing popularity and demand for certified seafood in these markets.
  • There are other benefits associated with certification such as a reduction in operating costs for farmers due to more judicious use of inputs along with better health of livestock from following best management practices.
  • Additionally, certifying the whole supply chain allows the end product to carry eco-labels or sustainability branding which makes a significant difference in the marketability of the products.
  • At the very least it will ensure compliance with the health, safety and quality norms of importing countries, and eliminate the chances of shipments being rejected.

 

Source: Business Line

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