Canberra: Australia has suspended the licences of 60 per cent of fumigation service providers in India, after an audit by Australian biosecurity.
The suspension of these 44 service providers, including 5 from Haryana and 3 from Punjab, was made last week. This could result in some exporters having to pay additional charges for refumigation of the consignments once it lands in Australia.
Containers in transit are not exempted from such division. If any suspended fumigation provider fumigates by a consignment, it would have to be be refumigated in Australia on arrival.
“This process will add up additional cost of fumigation…,” the department said. The additional costs could vary from (Australian dollar) A$700 to A$1,200 per container. (A$1=Rs 66.14).
Over 100 containers of Basmati rice will likely be affected by this suspension. If one container of Basmati rice is valued at $22,000, at least Rs 200 crore worth of consignments are at risk of either getting rejected or made to go through the costlier re-fumigation, said an affected exporter.
According to a communication from the Australian Department of Agriculture, Fisheries and Forestry, during the past few years, Canberra has moved from document-based approval toward continuous compliance monitoring and surprise audits. Australia operates one of the world’s strictest biosecurity systems. Even relatively small procedural failures may result in suspension.
Basmati rice exporters expressed concern over the development, saying re-fumigation would result in additional costs for them. Haryana and Punjab exporters said they have taken it up with APEDA (Agricultural and Processed Food Products Development Authority of India) and the Union Ministry of Agriculture, as its plant quarantine wing is the main body to govern fumigation.
Sources said the government is considering seeking an one-time exemption for rice shipments in transit and certified by the suspended entities.
Fumigation is a method to control the presence of pests in agricultural produce using methyl bromide and aluminium phosphide when a consignment is shipped or stored. Pests tend to get into the consignment during the transit period, which continues for days.
Calls to a couple of the suspended fumigators drew no response, though one fumigator in South India confirmed that its fumigation services had been suspended by Australia.
Australian biosecurity regulations require managing any risk if a treatment provider fails to comply with the country’s import conditions, scheme requirements, or the relevant treatment methodology.
India’s exports to Australia exceed $500 million a year. In the previous fiscal, shipments to Canberra totalled about $520 million, with Basmati rice topping the basket at $79 million, followed by miscellaneous processed items at $75 million and spices at $73 million.
Trade experts said the India-Australia Economic Cooperation and Trade Agreement (ECTA) has a mechanism under Chapter 13 (Dispute Settlement) to tackle such issues. The chaper mandates consultations before taking punitive trade action. The consultation requirement is generally intended for systemic trade grievances or disputes.
