BAFRA certification not recognised
Despite a growing local food industry, finding viable export markets beyond the country is going to be a big challenge. The biggest hurdle in facilitating export is the certification and standarisation of local produce.
Although Bhutan Agriculture and Food Regulatory Authority (BAFRA) is the designated competent authority to coordinate all bio-security activities, India, the biggest market, does not recognise test certificates issued by BAFRA for processed food.
An ADB’ report- Borders without Barriers highlighted this recently.
The report states that India, as an importing country, insists on certificates issued by the Food Safety and Standards of India. “The export of food products to India requires country-of-export certification. Exports to India must adhere to India’s Food Safety and Standards Food Import Regulations and General Grading and Marking Rules.”
Export of cardamoms and pepper must satisfy food safety certification by border customs authorities from reputed institutions in Kolkata. All food products for export must be sent to laboratories accredited by the Food Authority of India, state the report.
Chief of Analytical and Certification Division with BAFRA, Jamyang Phuntsho said that the regulatory authority was facing lots of challenges to bring together all the requirements to set up testing laboratories and standards. “With minimal budget and lack of skilled workers, we are not able to tap all the areas.”
However, he said that the National Testing Laboratory in Yusipang was accredited and accordingly, the Food Safety and Standard Authority of India (FSSAI) recognised the laboratory for testing of food and agriculture product to be exported to India.
FSSAI recognised the test conducted by the laboratory starting last year.
Further, he also said that cardamoms and asparagus flow without restriction to the Indian market.
The ADB report also states that Bhutan lacks adequate sanitary and phytosanitary testing laboratories (SPS) including infrastructure and skilled personnel needed to carry out the required tests both for export certification and import monitoring. Besides, it lacks adequate capacity to conduct sound, science-based risk analysis.
Those in manufacturing local produce said that the local produce had to route through Kolkata for certification because Bhutan did not have a Mutual Recognition Arrangement certification.
They said that goods usually laid in Jaigaon for weeks because samples from each consignment had to be sent to Kolkata for testing. “We have to bear multiple charges before exporting such as transportation charges, space charges, and labour charges,” said a local juice trader.
Likewise, the export of goods to Bangladesh has to be certified either by the country’s certifying authorities or from a third-country laboratory accredited by the International Organisation for Standardization or the South Asian Regional Standards Organisation.
A trader said most of the tests require sophisticated equipment and techniques. “The product samples are sent to India and Thailand, incurring delays and high costs,” he said.
A few entrepreneurs, exploring export markets said that costs for sending samples outside the country for testing were extremely high and not viable for small enterprises. “It costs around Nu 80,000 for a single sample test.”
Co-founder of Kingdom Essence, Pema C. Gyaltshen said that without certification, products, even if they were of premium quality, fails to get a premium price. She said that other than the certification related to food products, there was no testing or certification of innovative local products such as oils, soaps, and deodorants.
Meanwhile, BAFRA official said that they were exploring ways to include these produce.
Officials said that even if BAFRA was accredited, its certification alone will not suffice the individual requirement of different importing countries.
The ADB report pointed out that although BAFRA was identified as a certifying body, BAFRA is not accredited as a certifying body with international recognition.
It also states that there is no web-based portal dedicated to disseminating SPS-related information and documents.
For Bhutan to facilitate smooth trade among the neighbouring countries, the report states, it has to prioritise coordination and cooperation between numerous public and private stakeholders, which are anticipated to be a major challenge for Bhutan as it requires careful navigation of different stakeholder who has conflicting priorities and targets.
Other challenges include the absence of efficient transit mechanisms, poor connectivity at land ports, lack of transparency in import and export procedures, and absence of adequate border infrastructure.
These barriers left significant untapped potential in the implementation of trade facilitation policy in Bhutan leading to a notable disparity in the balance of trade.
Excluding trade in electricity, the country’s trade deficit stood at about USD 623 million in 2018. Total exports were valued at USD 474 million, while total imports were USD 1, 098 million.
India remains Bhutan’s most prominent trading partner in imports and exports. The share of India’s exports and imports in Bhutan’s overall trade basket was about 84 percent, in 2018.
To facilitate trade and make Bhutanese products competitive, the report highlights the need to assess the current inventory of SPS and technical barriers to trade infrastructure, legislation, and capacity building, including the signing of a mutual recognition agreement, certification, and accreditation.