Budget 2024: Sops for aquaculture may spur booming seafood exports further

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The Union Finance Minister has announced a slew of measures aimed at boosting the country’s aquaculture sector in the Budget. This will provide a renewed thrust to the seafood industry at a time when the marine products export from India has reached an all-time-high of ₹60,000 crore.

According to Rahul Guha, Director, Crisil Ratings, the shrimp processing sector will benefit from two specific announcements. “First, the government support for marketing and financing shrimp farming through Nabard will improve the supply chain, reduce time to exports and, hence, lower the cost of production for processors and farmers. Second, reduction in import duties on certain broodstock to 5 per cent will reduce costs for the farmers and, in turn, processors. This will make the cost structure leaner and enhance productivity over the medium term, giving shrimp exporters a boost,” he said.

Balasubramaniam V, general secretary of Prawn Farmers Federation of India, said the significant reduction in import duty from 15 to 5 per cent for shrimp and fish feeds and import duty reduction for broodstocks will provide farmers access to international, high-quality inputs at globally competitive prices, thereby enhancing productivity and profitability in the aquaculture sector.

Private participation

The initiative for private sector participation in Nucleus Breeding Centres (NBCs) through Nabard financing is expected to be a significant step forward for the aquaculture sector. Given that establishing NBCs is a long-term, research-oriented endeavour—particularly for domestic species, he said the industry reiterated the need for substantial grants.

The duty reduction will reduce the cost of shrimp feed and seed and enable the farmers to compete in international market. This will facilitate them to produce good quality priced feed to make their produce globally competitive, increase Indian shrimp production and market share. They will invest more in farming and produce more, said DV Swamy, Chairman, Marine Products Exports Development Authority.

Since shrimp feed constitutes 60 to 70 per cent of the total recurring cost of farming, the amount spent on feed by farmers is huge, making it unviable in many cases. For producing a kg of shrimp at least 1.25 kg of shrimp feed is required and roughly 1.25 million tonnes of feed must have been used for achieving this production, T Pradeepkumar, Vice Chancellor, Kerala University of Fisheries and Ocean Studies (Kufos) said

The decision to reduce the basic customs duty is a great step under the uncertainty prevailing in the export market. The additional financial inputs offered towards shrimp broodstock facilities will improve the seed quality, leading to better production and profitability to farmers, he said.

Nabard intervention, a boost

Lakkaraju Satyanarain from the shrimp industry in Andhra Pradesh said the Budget has to come out with a fineprint on the allocation of funds for breeding centres. The sector is in the process of setting up broodstock centres to reduce dependence on imports and the financial support will help to develop more such centres, thereby bringing down the production cost.

A veteran seafood exporter in Kochi said the intervention of Nabard to finance shrimp production, pre-processing, farming and exports will give a big boost to the seafood export sector to increase its volumes.

Majority pre-processing units — which are small and family-owned — are currently struggling to get finances for modernisation. They do not have the financial wherewithal to upgrade their pre-processing facilities to meet the required international standards. With the support from Nabard, the banks can now extend required loans on soft terms to upgrade their current pre-processing facilities to required international standards.

However, the demand for giving aquaculture status for fishing and shrimp culture is yet to be considered, he added.