As a result of COVID-19 pandemic, the norm around the world has been to institutionalize import and export system to ensure effective trade, and food quality and safety.
According to the Agriculture Minister Yeshey Penjor, every country is attempting to make systems more efficient and effective, as well as to decrease trade system leakages as much as possible. In India, for example, they implemented GST and created an ice gate, and now all movement systems are ice sliced, and because of the worldwide trend, it is now necessary to formalize the trade.
“As a result, this is a worldwide trend with which India is also grappling. And we, as a global community, must deal with it as well,” the Agriculture Minister said.
Lyonpo said that the traders are having trouble exporting due to the system, and the government is now trying to figure out how to get into it. The country needs to regulate both the export and import trade.
“The RNR products have remained in informal trade, which means that whatever is produced is taken to the border without value addition, proper packaging, cleaning, or certification, and sold at an open auction, with the buyers picking it up from the auction yard. After crossing the border, we have no idea where the product is going, what prices are being fetched, or whether it is being sold adding value or sold raw,” Lyonpo said.
He said people were satisfied once it was sold without being concerned about the price, and so the buyers had the upper hand.
“Since all RNR products are perishable, and they reasoned that if a portion could not be sold, it would be ruined, therefore, it was sold for the price they offered,” said Lyonpo.
Lyonpo said the country did not establish a capacity for the certification process because there were no facilities, and no employees were trained. Even while trading, no one bothered with the process of cleaning, grading, packaging, storing, or adding value to the produce. “And therefore, we were not able to set a price for the produce as it is currently in the hands of others.”
There hasn’t been much of a formal system in the RNR trade so far. Lyonpo said that there is no sense of long-term business; the idea was to start a firm and become wealthy overnight.
“You have no idea that you made a good profit this time, but you will lose money the following harvesting season,” Lyonpo said.
Lyonpo added, “We need to strengthen our business culture and integrity; if you deceive a buyer, you shouldn’t expect that buyer to buy after learning the truth. For instance, without grading, you could mix tiny and large products together, or rotten and good products together. As a result, we’ll need to make a lot of changes.”
The ministry is focusing its efforts to enhance the market system, including value addition and formal trade processes.
“However, this will take time. We will have to focus on improving the marketing system during this government term. We also need to expand our market research; a competitive market is required,” Lyonpo added.
Chief Executive Officer of Food Corporation of Bhutan Limited, Naiten Wangchuk, said that first and foremost, we must prepare ourselves. Trading channels begin with India, which is attempting to modify trade regulations in general, not just for Bhutan.
“Since India is our end destination of our trade, we have to change accordingly. Every country has their terms and condition to import the produce from different countries. For example, Malaysia and Thailand have their own policies. If we want to export, we have to prepare accordingly. They didn’t formalize before since there was no GST system in place, but now that one is in place, they’re attempting to make trading and record-keeping online,” he said.
He added, “We must prepare, and we must do so in accordance with what exporting countries are doing. Not only in terms of export, but also in terms of how we create items, when is the best time to harvest, and how is post-harvesting done, we must concentrate on our own production and change.”