Traders demand new horticulture varieties

Propose allocation of Rs200m for R&D to enhance fruit exports

KARACHI:

The All Pakistan Fruit and Vegetable Exporters and Importers Association (APFVEA), while presenting budget proposals for fiscal year 2024-25, has stressed the need for introducing new varieties of horticulture through extensive research and development (R&D) work.

Sharing details with The Express Tribune, APFVEA Patron-in-Chief Waheed Ahmed said new varieties should be developed for fresh mandarin (kinnow) to enhance export of the citrus fruit by allocating Rs200 million for R&D.

He called for withdrawing the 20% federal excise duty (FED) imposed on fruit juice industry in the previous budget as its sales had plunged 40% over the last year.

Apart from that, the high cost of phytosanitary certificates should be revised downwards to a reasonable level. Also, the aseptic bags used in the pulp industry may be exempted from import duty.

To enhance the shelf life of products, aseptic packaging bags are used but these are not manufactured locally. Hence, processing units have no other choice, but to import the bags which ultimately adds to the cost.

Similarly, he said, spare parts used in juice processing or manufacturing industries may be exempted from import duty.

The association patron-in-chief noted that the horticulture industry had been excluded from the FASTER tax refund system of the Federal Board of Revenue (FBR) with its benefits restricted to only five major export-oriented industries.

“It is imperative that the FASTER system is open to all sectors, including horticulture, to facilitate a seamless and automated process for prompt sales tax refund. This system is instrumental in maintaining liquidity for exporters and eliminating the need to approach the FBR.”

Turning to the Drawback of Local Taxes and Levies (DLTL) scheme, Waheed Ahmed highlighted the importance of revitalising the incentive scheme, which would empower exporters to enhance shipments and foster capacity building.

“Revitalisation of DLTL is essential for the continued growth and competitiveness of the export sector,” he stressed.

Currently, all power distribution companies impose capacity or fixed charges on industries, regardless of whether the entire production capacity is utilised. This policy adversely affects the horticulture industry, where operations are not year round due to the seasonal nature of fruits and vegetables.

He sought exemption from such charges, which would ease financial pressures and support sustainability of the horticulture sector.

Ahmed underscored the need for doing away with the State Bank of Pakistan’s current practice of lien marking on export proceeds, ranging from 4% to 9% based on delay in receiving export proceeds. This change will help address the financial constraints faced by exporters.

He demanded the allocation of a higher budget for participating in international fairs, especially for growing industries like horticulture, with higher subsidies. This way, exporters will be able to participate and gain access to new markets.

Additionally, Pakistan should consider participating in the Asia Fruit Logistica exhibition, particularly when the Trade Development Authority of Pakistan (TDAP) has distanced itself from such events.

Pointing to the guarantees sought from new exporters under the Export Finance Scheme, he advocated the necessity for an exporter-friendly scheme. Furthermore, it should be incorporated into the Pakistan Single Window to ensure online access.

Published in The Express Tribune, May 25^th, 2024.

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