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India: mango export may turn sour for the exchequer

This would surely leave a bitter aftertaste. After much hullabaloo about India`s landmark breakthrough in exporting mangoes to the US after a gap of 18 years, here comes the bad news. The exercise would cost the exchequer more than $2.27 million next year. The amount calculates to approximately 30 cents or Rs 13.50 per mango if the 2,000-tonne mango export target fixed for the next year is met.

Compare that with an average cost of Rs 7.50 per mango that an individual buys at Rs 30 a kg with typically 4 mangoes per kg! In fact, lesser the amount of mangoes exported, more the government would have to pay owing to a heavy fixed cost that it would have bear to continue the exports.

The US insists on irradiation treatment for plant health to allow any agriculture imports. It further stipulates that an inspection officer from the country be stationed at the treatment spot to monitor the process. The living expenses of the officer are borne by the exporting country, in this case India.

The cost incurred on hosting one such personnel is $30,000 per week. This is besides the cost of treatment and transportation of the consignment, which is paid for by the exporter. This year India exported 200 tonne of the fruit in a 3-week period and paid for 1 US department of agriculture inspector (which totalled $90,000) who was stationed at the only irradiation plant in the country located in Nasik. The arrangement meant that the government had to pay 11 cents or Rs 5 per exported mango.

However, to achieve the 2,000-tonne export target for the next season, India will have to significantly improve its infrastructure. For this purpose, the government is planning to install three irradiation machines, the cost of each being Rs 7 crore. Further, because the volume of exports would be much larger, each machine would operate in two shifts.

Thus, there would be six inspectors stationed in the country next season. Further, the export period next year would begin from the start of the season and would last 10 weeks. Thus the personnel cost that India would have to bear next year would be $1.8 million. Add to that $0.47 million incurred on setting up the three irradiation machines, thus taking the total cost for just facilitating mango exports to $2.27 million.

The final math is simple: with an export target of 2,000 tonne, and an average of four mangoes per kg, the government`s expense per mango computes to approximately 30 cents or Rs 13.50.

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