Port complexity, high testing fee, additional time in product redemption and absence of risk management have doubled import product pricing, according to the United States Department of Agriculture (USDA).
It said costs of imported agro-products increased 62 per cent on a single consignment.
This was disclosed at a business dialogue titled ‘Issues of Cross-border Trade: Importance of Risk Management System in Supply Chain of Agro-Products’ held at the FBCCI auditorium on Sunday.
Federation of Bangladesh Chambers Of Commerce and Industry (FBCCI) along with United States Department of Agriculture (USDA) Bangladesh Trade Facilitation Project organized the dialogue.
FBCCI president Mahbubul Alam chaired the programme where agriculture minister Dr Muhammad Abdur Razzaque was present as the chief guest.
Mohammad Abu Yusuf, additional secretary of finance division, and AAM Amimul Ehsan Khan, senior technical advisor of USDA Bangladesh Trade Facilitation (BTF), presented the keynote presentation where Md Alamgir, sectary general of FBCCI, moderated the ceremony.
At the programme, business leaders urged the policymakers to introduce term-based licence for low-risk items as well as start planning and negotiation mutual recognition agreements with trading partners.
Cross-border trade risk management is a globally accepted and practiced tool that creates a balance between facilitation and control in the clearance process. The key objective of risk management is to step up away from 100 per cent physical inspection, have stronger control over high-risk consignments and facilitate and expedite the release of low-risk ones.
Amimul said, “Though importers import 10-12 consignments per year, each consignment requires sample collection and testing from BSTI and Bangladesh Atomic Energy Commission (BAEC) which take 8-9 days to conduct and additional port charge increased to Tk 100,000.”
The current agro-products import clearance process is outdated because all consignments are treated similarly and visual inspection or testing is required for all consignments and no additional benefits for compliant traders.
“We need cross-border trade risk management lane-based approach where 3 types of lanes should be categorized--high, moderate and low--by stepping away from 100 per cent inspection of consignments,” he added.
The current scenario of trade is not business-friendly. The government is trying to control commodity prices by importing agro products like onion, wheat. But if the current trend continues, it will be harder for traders to fulfill the demand.
Abu Yusuf said, “The volume of trade in Bangladesh is expanding rapidly though resources are not there as expected. Risk management is a must in terms of cost of doing business which will increase FDI, enhance trade competitiveness.”
According to World Bank, countries implementing risk management have shown 1-5 days of reduction in clearance time.
“We should implement this in our business by policy change, expediting the legislative reforms, overarching ‘umbrella act’, issuing term-based license and negotiation mutual recognition agreements,” he added.
Michael J Parr, project director of USDA BTF said, “Implementing a system around risk based compliance and management in the import and export of food in the agricultural groups is a very important initiative for the government and for the country of Bangladesh.”
“The overall goal ultimately is to reduce the time and the cost for clearing of transactions of import and export consignment. Ultimately, by reducing the time and the cost for trading consignments, it makes Bangladesh more competitive, so businesses become more competitive and can compete on the global stage for more diverse agriculture products. And also consumers in Bangladesh get a fair price.”
Dr Abdur Razzaque said, “We want to diversify our export from RMG. But the progress and growth is extremely poor due to low facilities. We have to find and analyses and take comprehensive programme.”
“We need facilities such cold storage with multipurpose use, laborites for testing, modern and world class accredited packaging facilities. If we can confirm these, export will be facilited. We should call the related stakeholder and call all committee,” he added.
Md Borhan-E-Sultan, president of Bangladesh Food Stuff Importers and Suppliers Association, Ahsan Khan Chowdhury, panel advisor, FBCCI and chairman of Pran-RFL group, Md Hafizur Rahman, member of Bangladesh Competition Commission, Farid Uddin, panel advisor of FBCCI and former member of NBR, directors of FBCCI, representatives of government departments, and traders from different chambers were also present at the event.
