Export Marketing of Agricultural and Food Products

Dr.Ruchira Shukla Asst.Professor Institute of Agribusiness Management Navsari India dawned to independence on 15th of August 1947. The freedom we achieved came from the long struggle of our great national leaders and freedom fighters. But all along the freedom brought with it the responsibility to feed millions of stomachs on our own. The country was not self sufficient in food and food scarcity persisted and famine was looming large. Country was pushed into a Ship to Mouth Economy, depending on the external supply for the basic food requirement. It was in this milieu, in the context of 1 st Five Year Plan Pandit Jawarlal Nehru, the then Prime minister commented that: EVERYTHING ELSE CAN WAIT BUT NOT AGRICULTURE.Truly it reflected the urgency of situation and the paramount importance that the great leader attributed to the sector. As a result the Green Revolution emerged followed by the White and Yellow revolutions and finally the Blue revolution. From food scarcity our country marched to food security, and to food surplus. In the present context, to stop and think of the above words in the background of LPG (Liberalisation, Privatisation and Globalisation), the above words still stand as much valid and important as when they were said but in a slightly different sense. Truly the time for Second Green Revolution has come and this time the priorities are slightly different.To go in line with the national growth, the farm output growth should be 4%. Contribution of agriculture to GDP is also not proportional when compared to other sectors. The contribution of agriculture to GDP is only 20% when compared to 54% of the service sector implying that 60% of the population contributes less than a quarter of the Nations economic product. On the other side there are challenges raised by the changing international economic scenario. The WTO and related agreements have rendered the world as an open market with wide disparities between members. The member countries of the WTO were compelled to open up their markets to the world resulting in no more preferential protection to the areas like agriculture. This has necessitated an efficiency oriented and market driven production system wherein only those who can offer better products at a lower/ competitive price only can survive in the market. Newer Jargons of Export oriented agriculture; World market share and Value Addition have started lingering in the air. Quality and efficiency have become the key market governing factors. Productivity in agriculture has to go up for efficient utilization of the depleting resources to improve Agricultures share in the national product. At present Indias share in the world exports is only 0.60%, which is pittance for a country of our size. All of these call for the need to create newer opportunities in agriculture to retain the same population while effectively utilizing their capabilities. To remain vibrant in the post - liberalization global market driven economy, there is an urgent need to give a facelift to our agriculture from a tradition bound subsistence oriented system to a commercial market driven techno savvy production with a stress on the value addition and preferential marketing and Agri. Exports. Indian Agro Products In several agricultural sectors, India is the worlds leading or one of the largest producers. For example, the country is second largest milk producing country in the world. The agricultural sector in the country is known for its high degree of product diversity. The complementary nature of a number of important Indian agricultural products, in comparison to those produced in west and other countries, provide India considerable export opportunities to these markets. At

present, the Indian agriculture industry is on the brink of a revolution, which will modernize the entire food chain, as the total food production in the country is likely to double in the next ten years. According to recent studies, the total turnover of Indian food market is approximately Rs.250000 crores (US $ 69.4 billion), out of which, the share of value-added food products is around Rs.80000 crores (US $ 22.2 billion). The Government of India has also sanctioned proposals for joint ventures, foreign collaborations, industrial licenses and 100% export oriented units conceiving of an investment of Rs.19100 crores (US $ 4.80 billion) out of which foreign investment is over Rs. 9100 crores (US $ 18.2 Billion). The Indian agricultural food industry also assumes significance owing to country's sizable agrarian economy that accounts for over 35% of GDP and employs around 65 % of the population. Both in terms of number of joint- ventures / foreign collaborations and foreign investment, the consumer food segment has the top priority Exports Agricultural exports were 44 % of total exports in FY 1960; they decreased to 32 % in FY 1970, to 31 % in FY 1980, to 18.5 % in FY 1988, and to 15.3 % in FY 1993. This drop in share of agriculture in total exports was somewhat misleading because agricultural products, such as jute and cotton, which were exported in the raw form in the 1950s, have been exported as cotton yarn, fabrics, ready-made garments, coir yarn, and jute manufactures since the 1960s. Excellent export prospects, competitive pricing of agricultural products and standards, which are internationally comparable have created enormous trade opportunities in the Indian agro industry. Exports of Agricultural products (2004-05)

Major Export Markets Major destinations for export of Indian agricultural products (2006-07), include Product Floriculture Fruits & Vegetable Seeds Other Fresh Vegetables Fresh Mangoes Fresh Grapes Other Fresh Fruits Dried & Preserved Vegetables Mango Pulp Pickles & Chutneys Other Processed Fruits Poultry Products Dairy Products Groundnuts Cocoa Products Cereal Preparations Basmati Rice Non Basmati Rice Wheat Pulses Major Markets USA, Japan, UK, Netherlands & Germany Pakistan, Bangladesh, USA, Japan & Netherlands UAE, Bangladesh, Pakistan, Nepal & Sri Lanka UAE, Bangladesh, UK, Saudi Arabia & Nepal Netherlands, UK, UAE, Bangladesh, Belgium Bangladesh, UAE, Netherlands, Nepal, Saudi Arabia Russia, France, USA, Germany & Spain Saudi Arabia, Netherlands, UAE, Yamen, Arab Republic & Kuwait Russia, USA, Belgium, Netherlands & France USA, Netherlands, UK, UAE & Saudi Arabia UAE, Kuwait, Oman, Germany & Japan Bangladesh, Algeria, UAE, Yamen, Arab Republic & Egypt Indonesia, Malaysia, Philippines, UK & Singapore Nepal, Netherlands, Malaysia, Yamen Arab Republic & UAE USA, UK, Nepal, Sri Lanka & UAE Saudi Arabia, Kuwait, UK, UAE & Yamen Arab Rep. Nigeria, Bangladesh, South Africa, UAE & Ivory Coast Bangladesh, Philippines, UAE, Sudan & Myanmar Bangladesh, Sri Lanka, Pakistan, UAE & Nepal

FutureForecasts According to experts, India has to play a bigger role in the global markets in agriculture products in the future. The country is expected to strengthen its position among the worlds leading

exporters of rice. Presently it is the 2nd largest rice producer after China and the 3rd largest netexporter after Thailand and Vietnam. However, recent reports states that agriculture plays an important, though declining role in Indian economy. Its contribution in overall GDP fell from 30 % in the early nineties, to below 17.5 % in 2006. The country is a world leader in specialist products, such as buffalo milk, spices and bananas, mangoes, chickpeas etc., which are considered as important in the Indian diet and are also exported. India is the 5th largest cultivator of biotech crops across the world, ahead of China. In the year 2006, around 3.8 million hectares of land were cultivated with genetically modified crops, by about 2.3 million farmers. The primary GM crop is Bt Cotton that was introduced in 2002. Agribusiness Strategies for Future: A Perspective Agriculture and food business, in the last few decades, have seen a sea change in terms of demand-supply, cropping pattern, international trade, consumer preferences, technological advancement, trading environment, supply chain and regulatory frameworks. With the advent of globalisation and agriculture being a focus area in multilateral trade negotiations, most of the countries are enabling and facilitating their domestic agriculture sector, considering the global development. The trend reflects that commoditisation of farm produce would no longer be strategy for the agribusiness firms, but they have to adopt pull strategy through value addition and brand building. The strategy of pushing large volume of standardised products worked well till now, because consumers sought basic staples for cooking meals at their kitchen. But with the change in lifestyle, increase in income, higher incidence of nuclear families and working women and preference for convenience foods, offer agribusiness firms new opportunities in the processed food and ready-to-eat segments. Food products, such as hygienically packed cut-salad, cut-fruits, cut-vegetables, cut-meat and cut-chicken would be visible very soon in the self of Indian retail shops. Today's Indian farmers' crop growing patterns do not reflect the consumer preference. In future, they have to specialise in the production of certain types of agricultural products, depending on the international consumers' demand, using the latest technologies. To strengthen the supply chain operations and regular supply of quality raw materials, Indian agribusiness firms are adopting backward integration strategy by improving linkages with farmers through contract farming arrangements. Envisaging the future prospect of processed food, several Indian and multinational companies have entered into joint venture arrangements to undertake significant market development efforts to encourage the consumption of processed foods. Food safety and traceability of the food ingredients and products have major concerns in international trade. These concerns would place pressure on food companies to provide complete information about the sources of inputs in their products. In response of these, new technologies are also being developed to track down the sources. In future, technology would be a major driving force in agribusiness. Hence adoption of technology across the value chain such as biotechnology in crop and animal products for productivity enhancement or value-addition to processing/packaging technology for better shelf life would be a novel tool to cater to future food consumers.The growth of organised food retailing in India, which is in the offing, has a multiplier effect as it will lead to greater efficiencies in supply chain, provide necessary

infrastructure such as chilled/frozen space, superior display cabinets for processed dairy products and frozen meat products and reduce the post-harvest losses significantly. How to Start Export? It is a fair question that every first time exporter wants to ask. Export in itself is a very wide concept and lot of preparations is required by an exporter before starting an export business. A key success factor in starting any export company is clear understanding and detail knowledge of products to be exported. In order to be a successful in exporting one must fully research its foreign market rather than try to tackle every market at once. The exporter should approach a market on a priority basis. Overseas design and product must be studies properly and considered carefully. Because there are specific laws dealing with International trade and foreign business, it is imperative that you familiarize yourself with state, federal, and international laws before starting your export business. However, before we go deep into "How to export ? let us discuss what an export is and how the Government of Indian has defined it. In very simple terms, export may be defined as the selling of goods to a foreign country. However, As per Section 2 (e) of the India Foreign Trade Act (1992), the term export may be defined as 'an act of taking out of India any goods by land, sea or air and with proper transaction of money. Why Need to Export There are many good reasons for exporting: The first and the primary reason for export is to earn foreign exchange. The foreign exchange not only brings profit for the exporter but also improves the economic condition of the country. Secondly, companies that export their goods are believed to be more reliable than their counterpart domestic companies assuming that exporting company has survive the test in meeting international standards. Thirdly, free exchange of ideas and cultural knowledge opens up immense business and trade opportunities for a company. Fourthly, as one starts visiting customers to sell ones goods, he has an opportunity to start exploring for newer customers, state-of-the-art machines and vendors in foreign lands. Fifthly, by exporting goods, an exporter also becomes safe from offset lack of demand for seasonal products. Lastly, international trade keeps an exporter more competitive and less vulnerable to the market as the exporter may have a business boom in one sector while simultaneously witnessing a bust in a different sector. No doubt that in the age of globalization and liberalizations, Export has became of the most lucrative business in India. Government of India is also supporting exporters through various incentives and schemes to promote Indian export for meeting the much needed requirements for

importing modern technology and adopting new technology from MNCs through Joint ventures and collaboration. Before starting an export, an individual should evaluate his companys export readiness. Further planning for export should be done only, if the companys assets are good enough for export. It is believed that if the products has survived in the domestic market, there is a good chance that it will also be successful in international market, at least those where similar needs and conditions exist. Once a businessman decides to sell his products, the next step is to developing a proper export plan. While planning an export strategy, it is always better to develop a simple, practical and flexible export plan for profitable and sustainable export business. Export Planning For a proper export planning following questions need to answered: 1. 2. 3. 4. 5. 6. Which products are selected for export development? What modifications, if any, must be made to adapt them for overseas markets? Which countries are targeted for sales development? In each country, what is the basic customer profile? What marketing and distribution channels should be used to reach customers? What special challenges pertain to each market (competition, cultural differences, import controls, etc.), and what strategy will be used to address them? 7. How will the product's export sale price be determined? 8. What specific operational steps must be taken and when? 9. What will be the time frame for implementing each element of the plan? 10. What personnel and company resources will be dedicated to exporting? 11. What will be the cost in time and money for each element? 12. How will results be evaluated and used to modify the plan? From the start, the plan should be viewed and written as a management tool, not as a static document. Objectives in the plan should be compared with actual results to measure the success of different strategies. Identifying Export Product. A key factor in any export business is clear understanding and detail knowledge of products to be exported. The selected product must be in demand in the countries where it is to be exported. There are products that sell more often than other product in international market. It is not very difficult to find them from various market research tools. However, such products will invariably have more sellers and consequently more competition and fewer margins. On the other hand - a niche product may have less competition and higher margin - but there will be far less buyers. Key Factors in Product Selection The product should be manufactured or sourced with consistent standard quality, comparable to your competitors Timely supply is a key success factor in export business The price of the exported product should not fluctuate very often - threatening profitability to the export business.

 Strictly check the government policies related to the export of a particular product. Carefully study the various government incentive schemes and tax exemptions Import regulation in overseas markets, specially tariff and non-tariff barriers.. Registration/Special provision for your products in importing country. This is specially applicable for processed food and beverages, drugs and chemicals. Keep in mind special packaging and labeling requirements of perishable products like processed food and dairy products. Special measures are required for transportation of certain products, which may be bulky or fragile or hazardous or perishable.

Some of the opportunities for growth in Agriculture and food sector are summarised below: The country's share in the world trade of processed fruits and vegetables is still less than 1%. As such, abundant investment opportunities are there in the expanding of the export market. There is a good international demand for certain fresh fruits as well as processed fruits products. Fresh fruits identified as having good export potential are mangoes, grapes, bananas, lichee and exotic fruits like sapota, pomegranate, custard apple and other tropical fruits. Among vegetables, the item identified as having good export potential are onions, potatoes and green vegetables like okra, bitter gourd, green chilies and other seasonal vegetables Many non-traditional vegetables mainly processed & gherkins and other like asparagus, celery, bell pepper, sweet corn, green and lime beans and organically grown vegetables are also being increasingly exported. With the commercialisation of refer containers in India, the exports of mangoes, grapes, processed mushrooms etc. have started going to UK, Europe, Middle East, Singapore and Hongkong. This mode of transport is very cost effective as there is a saving of 50% on freight when compared to Air. In a small way, refrigerated trucks are also available for domestic transport.

Market Selection The next step is to start evaluating opportunities in promising export markets. It involves the screening of large lists of countries in order to arrive at a short list of four to five. The shorting method should be done on the basis of various political, economic and cultural factors that will potentially affect export operations in chosen market. Some factors to consider include: 1. Geographical Factors o Country, state, region, o Time zones, o Urban/rural location logistical considerations e.g. freight and distribution channels

2. Economic, Political, and Legal Environmental Factors o Regulations including quarantine, o Labelling standards, o Standards and consumer protection rules, o Duties and taxes 3. Demographic Factors o Age and gender, o Income and family structure, o Occupation, o Cultural beliefs, o Major competitors, o Similar products, o Key brands. 4. Market Characteristics o Market size, o Availability of domestic manufacturers, o Agents, distributors and suppliers. Foreign Market Selection ProcessMarket selection process requires a broad range of informations depending upon the products or services to be exported, which includes:

The demand for product/service. The size of the potential audience. Whether the target audience can affords product. What the regulatory issues are that impact on exports of product. Ease of access to this market proximity/freight. Are there appropriate distribution channels for product/service. The environment for doing business language, culture, politics etc. Is it financially viable to export to selected market. Talking to colleagues and other exporters. Trade and Enterprise web site, publications, call centre. The library. The Internet.

From the results narrow your selection down to three to five markets and undertake some indepth research relating specifically to your product. While doing so, some of the questions that may arise at this stage are:

Who would your major competitors be? What are the key brands or trade names? What is the markets structure and shape? What is the markets size? Are there any niche markets, and if so how big are they? Who are the major importers/ stockists / distributors / agencies or suppliers? What are the other ways to obtain sales/representation? What are the prices or fees in different parts of the market? What are the mark-ups at different distribution levels?

What are the import regulations, duties or taxes, including compliance and professional registrations if these apply? How will you promote your product or service if there is a lot of competition? Are there any significant trade fairs, professional gathers or other events where you can promote your product or service? Packaging do you need to change metric measures to imperial, do you need to list ingredients? Will you need to translate promotional material and packaging? Is your branding colours, imagery etc., culturally acceptable?

Foreign Market Selection Entry Having completed the market selection process and chosen your target market, the next step is to plan your entry strategy. There are a number of options for entering your chosen market. Most exporters initially choose to work through agents or distributors. In the longer term, however, you may consider other options, such as taking more direct control of your market, more direct selling or promotion, or seeking alliances or agreements. Registration of Exporters. Once all the research and analysis is done its time to get registered with the various government authorities. Registration with Director General of Foreign Trade (DGFT) For every first time exporter, it is necessary to get registered with the DGFT (Director General of Foreign Trade), Ministry of Commerce, Government of India. DGFT provide exporter a unique IEC Number. IEC Number is a ten digits code required for the purpose of export as well as import. No exporter is allowed to export his good abroad without IEC number. Registration with Export Promotion Council Registered under the Indian Company Act, Export Promotion Councils or EPC is a non-profit organisation for the promotion of various goods exported from India in international market. EPC works in close association with the Ministry of Commerce and Industry, Government of India and act as a platform for interaction between the exporting community and the government. Registration with Commodity Boards Commodity Board is registered agency designated by the Ministry of Commerce, Government of India for purposes of export-promotion and has offices in India and abroad. At present, there are five statutory Commodity Boards under the Department of Commerce. These Boards are responsible for production, development and export of tea, coffee, rubber, spices and tobacco. Registration with Income Tax Authorities Goods exported out of the country are eligible for exemption from both Value Added Tax and Central Sales Tax. So, to get the benefit of tax exemption it is important for an exporter to get registered with the Tax Authorities.

Export Sales Leads Export Sales leads are initial contacts a seller or exporter seeks in order to finalize a deal or agreement for export of goods and are considered as the first step in the entire sales process. After getting the first lead, a company should respond to that lead in a very carefully manner in order to convert that opportunity into real export deal.Sales leads can be generated either through a word-of-mouth or internet research or trade show participation.As the buyer is far away and sometimes communication process can be difficult, so its always better to make an extra effort to understand the exact need of the customer. After receiving a lead it is quite important to acknowledge the enquirer within 48 hours of receiving the enquiry either through e-mail or fax. Acknowledgement also gives an option to provide further detail about the product or to make an enquiry about the buyer.Quality products strengthen buyer seller relationship, so its always better to provide quality products to the buyers. Exporting Product Samples. The foreign customer may ask for product samples before placing a confirmed order. So, it is essential that the samples are made from good quality raw materials and after getting an order, the subsequent goods are made with the same quality product. Extra care should be taken in order to avoid the risk associated in sending a costly product sample for export. Secrecy is also an important factor while sending a sample, especially if there is a risk of copying the original product during export. Export Pricing And Costing. Pricing and costing are two different things and an exporter should not confuse between the two. Price is what an exporter offer to a customer on particular products while cost is what an exporter pay for manufacturing the same product. Export pricing is the most important factor in for promoting export and facing international trade competition. It is important for the exporter to keep the prices down keeping in mind all export benefits and expenses. However, there is no fixed formula for successful export pricing and is differ from exporter to exporter depending upon whether the exporter is a merchant exporter or a manufacturer exporter or exporting through a canalising agency. Determining Export Pricing Export Pricing can be determine by the following factors:

Range of products offered. Prompt deliveries and continuity in supply. After-sales service in products like machine tools, consumer durables. Product differentiation and brand image. Frequency of purchase. Presumed relationship between quality and price. Specialty value goods and gift items. Credit offered. Preference or prejudice for products originating from a particular source.

Aggressive marketing and sales promotion. Prompt acceptance and settlement of claims. Unique value goods and gift items.

Export Costing Export Costing is basically Cost Accountant's job. It consists of fixed cost and variable cost comprising various elements. It is advisable to prepare an export costing sheet for every export product.As regards quoting the prices to the overseas buyer, the same are quoted in the following internationally accepted terms which are commonly known as Incoterm. Appointing a Sales Agent Selling a product through an overseas agent is a very successful strategy. Sales agents are available on commission basis for any sales they make. The key benefit of using an overseas sales agent is that you get the advantage of their extensive knowledge of the target market. Sales agent also provides support to an exporter in the matter of transportation, reservation of accommodation, appointment with the government as and when required. It is, therefore, essential that one should very carefully select overseas agent. Appointing right sales agent not only enhance the profit of an exporter but also avoid any of risks associated with a sales agent.. Some source of Information on Agents is:

Government Departments Trade Associations. Chambers of Commerce. Banks. Independent Consultants. Export Promotion Councils. Advertisement Abroad.

Good Agricultural Practices (GAP) for Fresh Fruits and Vegetables Fruits and vegetable consumption is an important component of diet of the US consumers who have access to varied types of domestic and exotic fruits from all parts of the world. As the consumption of fresh produce has increased in USA, it was also noticed that there was significant increase in the number of foodborne disease outbreak associated with fresh produce. There were few cases where documented evidence had shown that the foodborne illness could be traced back to poor agricultural practices. Media attention related to foodborne diseases associated with fresh produce caught attention and consequently many food experts have developed a strategy that would reduce the occurrence of microbial contamination. Consequently, the food retailers have enforced their growers to follow certain growing practices which could reduce, not eliminate, the microbial contamination of produce. These practices are known as Good Agricultural Practices (GAP). The concept of Good Agricultural Practices (GAP) has evolved in recent years in the context of a rapidly changing and globalising food economy and as a result of the concerns and commitments of a wide range of stakeholders about food production and security, food safety and quality, and the environmental sustainability of agriculture. According to the Food and Agriculture Organisation (FAO), GAP is the application of available knowledge to addressing environmental, economic and social sustainability for on-farm

production and post-production processes resulting in safe and healthy food and non-food agricultural products. GAP is formally recognised in the international regulatory framework for reducing risks associated with the use of pesticides, taking into account public and occupational health, environmental and safety considerations. Considering the importance of GAP, fruits and vegetable farmers should adopt it and minimise the risk of contamination, right from pre-planting stage of crop to post-harvest stage of the crop. Some of the major risk minimising measures are highlighted below: Pre-planting Measures Site selection,Manure handling and field application,Manure storage and sourcing,Timely application of manure,Selection of appropriate crop Production Measures Irrigation water quality ,Irrigation methods,Field sanitation and animal exclusion Harvest Clean harvest aids,Worker hygiene and training Post-harvest Handling Worker hygiene,Monitor wash water quality,Sanitize packinghouse and packing operations Pre-cooling and cold storage: After harvesting, fruits and vegetables should be quickly cooled to minimize the growth of pathogens and maintain good quality. Water bath temperature for cooling should not be more than 10F cooler than the produce pulp temperature. Refrigeration room should not be overloaded beyond cooling capacity. Transportation of produce from farm to market: Proper cleanliness of the transportation vehicles should be ensured before loading. Farmers have to make sure that fresh fruits and vegetables are not shipped in trucks which have carried live animals or harmful substances. If these trucks must be used, they should be washed, rinsed, and sanitized them before transporting fresh produce. For traceability norms, it must be ensured that each package leaving the farm can be traced to field of origin and date of packing. The above-mentioned Good Agricultural Practices (GAP) are still at a nascent stage in India. There are very few farmers who may be practicing it because of compulsion from the international buyers. But it should be thoroughly emphasized that food safety, from farm to fork, is the responsibility of everyone throughout the food system. In addition to growers and packers, food handlers such as food processors, retailers, food service workers, and even consumers in their homes have a responsibility for food safety. Branding ,Packing and Labeling of Goods. An important stage after manufacturing of goods or their procurement is their preparation for shipment which involves packaging and labelling of goods to be exported. Proper packaging and labelling not only makes the final product look attractive but also save a huge amount of money by saving the product from wrong handling the export process. Packaging The primary role of packaging is to contain, protect and preserve a product as well as aid in its handling and final presentation. Packaging also refers to the process of design, evaluation, and production of packages. The packaging can be done within the export company or the job can be

assigned to an outside packaging company. Proper and attractive packaging play an important role in encouraging a potential buyer.Packages can have features which add convenience in distribution, handling, display, sale, opening, use, and reuse. Packaging can play an important role in reducing the security risks of shipment. It also provides authentication seals to indicate that the package and contents are not counterfeit. Packages also can include anti-theft devices, such as dye-packs, RFID tags, or electronic article surveillance tags, that can be activated or detected by devices at exit points and require specialized tools to deactivate. Using packaging in this way is a means of loss prevention. Active and Intelligent Food Packaging The main purpose of food packaging is to protect the food from microbial and chemical contamination, oxygen, water vapour and light, promotion of convenience and providing product information. The type of packaging used therefore has an important role in determining the shelf life of a food. The various packing concepts include, passive packaging, active packaging and intelligent packaging. Passive Packaging: Passive Packaging provides protection from external elements such as air and moisture. Thos is a traditional packaging that involves the use of a covering material, characterized by some inherent insulating, protective and ease-of-handling qualities. The most common example of this type of packaging is a simple plastic bag. Active Packaging: Active Packaging actively changes the condition of the packaged food to extend life or to improve safety and sensory properties, while maintaining the quality of the packaged products. Intelligent Packaging: Intelligent Packaging monitors the condition of packaged foods to give information about the quality of the packaged food during transport and storage. With changes in the way food products are produced, distributed, stored and retailed, reflecting the continuing increase in consumer demand for improved quality and extended shelf life for packaged foods, are placing greater and greater demands on the performance of food packaging. Considering these aspects, innovative active and intelligent packaging concepts are being developed to

Retain integrity and actively prevent food spoilage (shelf-life) Enhance product attributes (look, taste, flavour, aroma etc.,) Respond actively to changes in product or package Communicate product information, product history or condition to user Assist with opening and indicate seal integrity Confirm product authenticity and act to counter theft

The future for packaging Consumer and societal factors are likely to drive the adoption of smart packaging in the future. The growing need for information on packaging will mean there has to be a step change in providing this information. Improved convenience is a value added function that customers are likely to pay extra for as lifestyles change. The vision of the future of packaging is one in which the package will increasingly operate as a smart system by incorporating conventional and active

materials, adding value benefits across the packaging supply chain. For materials to be adopted in packaging, they need to be inexpensive relative to the value of the product, reliable, accurate, reproducible in their range of operation and environmentally benign and food contact safe. Labeling Like packaging, labeling should also be done with extra care. It is also important for an exporter to be familiar with all kinds of sign and symbols and should also maintain all the nationally and internationally standers while using these symbols. Labelling should be in English, and words indicating country of origin should be as large and as prominent as any other English wording on the package or label. Labelling on product provides the following important information:

Shipper's mark Country of origin Weight marking (in pounds and in kilograms) Number of packages and size of cases (in inches and centimeters) Handling marks (international pictorial symbols) Cautionary markings, such as "This Side Up." Port of entry Labels for hazardous materials

Labelling of a product also provides information like how to use, transport, recycle, or dispose of the package or product. With pharmaceuticals, food, medical, and chemical products, some types of information are required by governments. For food packed in sacks, only harmless dyes should be employed, and the dye should not come through the packing in such a way as to affect the goods. Branding With number of products in the international markets increasing, they are virtually indistinguishable from one another. The only way to break out of the commodity status for the products is by incorporating value into consumer's perceptions of the products. This is where branding comes into picture. Brand is the intangible value built into an ordinary product or service that helps it to stand out from the crowd and command premium price. It has to be supported by product quality and market accessibility. Henceforth, the products which has "Made in India" logo has to be of superior quality to fulfill the expectations of international consumers. . Thus "Made in India"- national branding is the identification and use of the positive national values when trying to influence international buyers/consumers. The logo becomes more important when USA guidelines for voluntary labeling of country of origin on imports of various agri commodities (not processed foods) by September, 2002 and by September 30, 2004 regulations would be promulgated for stricter implementation of it. India should take up massive brand building exercise for promoting its agri products under an umbrella "Brand of India" logo. There are agri products like Indian Basmati, Darjeeling Tea, Alphonso mango etc., which have its own brand recognition in international market, though it is always better to build a national brand to gain more market acceptability in overseas markets. APEDA's "Quality Produce of India" With a similar view, Agricultural and Processed Food Products Export Development Authority (APEDA), a government organisation, has developed a system for grant of the certification mark

i.e. "Quality Produce of India" for agricultural products (under APEDA's mandate).. This certification mark will be granted on the basis of compliance with hygiene standards, implementation of quality assurance system such as ISO 9000, food safety system such as HACCP, backward linkage, residue testing of pesticides and contaminants, laboratory facilities and nature of complaint etc. This Certification Mark will be owned by APEDA and only such exporters whose produce / products conform to the prescribed parameters would be allowed / licensed to use the trade mark for exports. APEDA will register this Certification Mark globally and its use will be governed by a set of regulations. APEDA will also publicise this certification mark globally across media. Spices Board of India has also launched the Indian Spices Logo to make the international consumer aware about the intrinsic qualities and acquired superiority of Indian spices. The Board awards the logo selectively to exporters who have certified processing and quality control capability and maintain a high level of hygiene and sanitation at all stages. Inspection Certificates and Quality Control. An important aspect about the goods to be exported is compulsory quality control and preshipment inspection. For this purpose, Export Inspection Council (EIC) was set up by the Government of India under Section 3 of the Export (Quality Control and Inspection) Act, 1963. It includes more than 1000 commodities which are organized into various groups for a compulsory pre-shipment inspection. It includes Food and Agriculture, Fishery, Minerals, Organic and Inorganic Chemicals, Rubber Products, Refractoriness, Ceramic Products, Pesticides, Light Engineering, Steel Products, Jute Products, Coir and Coir Products, Footwear and Footwear Products. ISI Certification Indian Standards Institute now known as Bureau of Indian Standard (BIS) is a registered society under a Government of India. BIS main functions include the development of technical standards, product quality and management system certifications and consumer affairs. AgMmark Certification AgMark is an acronym for Agricultural Marketing and is used to certify the food products for quality control. Agmark has been dominated by other quality standards including the non manufacturing standard ISO 9000. Benefits of ISI and Agmark Certification Products having ISI Certification mark or Agmark are not required to be inspected by any agency. These products do not fall within the purview of the export inspection agencies network. The Customs Authorities allow export of such goods even if not accompanied by any preshipment inspection certificate, provided they are otherwise satisfied that the goods carry ISI Certification or the Agmark. Self Certification Scheme Under the self Certification Scheme, large exporters and manufacturers are allowed to inspect their product without involving any other party. The facility is available to manufacturers of engineering products, chemical and allied products and marine products. Self-Certification is given on the basis that the exporter himself is the best judge of the quality of his products and will not allow his reputation to be spoiled in the international market by compromising on quality. Self-Certification Scheme is granted to the exporter for the period of one year. Exporters with proven reputation can obtain the permission for self certification by submitting an

application to the Director (Inspection and Quality Control), Export Inspection Council of India, New Delhi. ISO 9000 The discussion on inspection certificate and quality control is incomplete without ISO-9000. Established in 1987, ISO 9000 is a series of international standards that has been accepted worldwide as the norm assuring high quality of goods. The current version of ISO 9000 is ISO 9000:2000. Expot Risk Management. Like any business transaction, risk is also associated with good to be exported in an overseas market. Export is risk in international trade is quite different from risks involve in domestic trade. So, it becomes important to all the risks related to export in international trade with an extra measure and with a proper risk management.The various types of export risks involve in an international trade are as follow: Credit Risk Sometimes because of large distance, it becomes difficult for an exporter to verify the creditworthiness and reputation of an importer or buyer. Any false buyer can increase the risk of non-payment, late payment or even straightforward fraud. So, it is necessary for an exporter to determine the creditworthiness of the foreign buyer. Poor Quality Risk Exported goods can be rejected by an importer on the basis of poor quality. So it is always recommended to properly check the goods to be exported. Inspection is normally done at the request of importer and the costs for the inspection are borne by the importer or it may be negotiated that they be included in the contract price. Transportation Risks With the movement of goods from one continent to another, or even within the same continent, goods face many hazards. There is the risk of theft, damage and possibly the goods not even arriving at all. Logistic Risk The exporter must understand all aspects of international logistics, in particular the contract of carriage. This contract is drawn up between a shipper and a carrier (transport operator). For this an exporter may refer to Incoterms 2000, ICC publication. Legal Risks International laws and regulations change frequently. Therefore, it is important for an exporter to drafts a contract in conjunction with a legal firm, thereby ensuring that the exporter's interests are taken care of. Political Risk Political risk arises due to the changes in the government policies or instability in the government sector. So it is important for an exporter to be constantly aware of the policies of foreign governments so that they can change their marketing tactics accordingly and take the necessary steps to prevent loss of business and investment.

Exchange Rate Risks Exchange rate risk is occurs due to the uncertainty in the future value of a currency. Exchange risk can be avoided by adopting Hedging scheme. A risk management plan helps an exporter to broaden the risk profile for foreign market. For a small export business, an exporter must keep his risk management analysis clear and simple. Export risk mitigations are the various strategies that can be adopted by an exporter to avoid the risks associated with the export of goods. Government initiatives to promote food exports The Government of India (GOI) has accorded high priority to the establishment of cold chains and encourages major initiatives in this sector. Foreign equity participation of 51% is permitted for cold chain projects. There is no restriction on import of cold storage equipment or establishing cold storages in India. National Horticulture Board (NHB) operates a capital investment subsidy scheme (CISS) which provides 25% (maximum Rs.50 lakhs) subsidies to the promoter. Furthermore, to handle the expected higher agricultural production during the Tenth Plan Period, the Inter Ministerial Task force on Agricultural Marketing Reforms constituted by Ministry of Agriculture, Government of India has recommended the creation of additional cold chain facilities at an investment cost of Rs. 2500 crore of which Rs. 625 crore are to be provided as subsidy and the rest has to come as private investment. They have also suggested modernization of existing facilities with an investment cost of Rs. 2100 crore of which Rs. 525 crore are to be subsidy and the balance to come as private investment. The state governments also have initiatives in the food processing and cold chain sectors. For example the Gujarat government has accorded priority to agro processing and horticulture, in view of the high export potential for fruits like mango, banana and chikoo. The government supports the sector by providing assistance to farmers for agricultural inputs, developing systems like drip irrigation and encouraging development of infrastructure facilities like warehousing, cold chain, etc for better pre-harvest and post-harvest crop management. Gujarat also has good logistical infrastructure such as airport, seaport and extensive road & railway network. Other states such as Maharastra , Andhra Pradesh, Kerala and Punjab have similar schemes in place. Agri Export Zones (AEZs): The concept of Agri Export Zone takes a comprehensive view of a particular produce/ product located in a geographically contiguous area for the purpose of developing and sourcing raw materials, their processing/packaging, leading to final exports. The entire effort is centred on a cluster approach of identifying the potential products, geographical region in which these products are grown and adopting an end to end approach of integrating the entire process, right from the stage of production till it reaches the consumption stage The objective of Agri Export Zones of providing remunerative returns to farmers on a sustained basis by improved access to exports. The emphasis of the scheme is on market orientation. It starts with identification of products, which have a good export potential, devising strategies for market penetration and niche marketing, and then taking necessary steps to exploit the market potential. The implementation of projects under the Agri Export Zone is expected to result in

bringing down cost of production, enhance product acceptability and competitiveness in the international market and better price realization for agro products. Central as well as State Government and their agencies are providing a variety of financial assistance to various agri export related activities. These extend from providing financial assistance for Training and Extension, R&D, Quality Upgradation, Infrastructure and Marketing etc. Thus, whereas Central government Agencies like APEDA, NHB, Dept. of Food Processing Industries, Ministry of Agriculture provide assistance, a number of State Governments have also extended similar facilities. For instance, in Tamil Nadu, the AEZs would focus on grapes, mangoes and chikkoo, in Kerala --vegetables, in Punjab and Haryana -- kino, wheat and rice, Karnataka -- vegetables and flowers, Maharashtra -- mangoes, grapes and flower, Gujarat -- bananas, mango, castor and garlic, and in Uttaranchal -- litchi and medicinal plants. Potential fruits identified for increasing the exports include apples, oranges, bananas, watermelons, mandarins, pineapples, and mangoes and guavas. Potential vegetables identified include garlic, cauliflower, tomatoes, potatoes, cucumbers, peas, mushrooms, onions and eggplants. Major problems that come across while exporting fresh fruits and vegetables from India include low productivity (cost competitiveness) as compared to global standards, prevalence of low level of pre-harvest / post-harvest technologies, international quality standards and existence of distortion in market channels Export potential is also high in case of cash crops such as cotton, tea, coffee, sugar and spices. However, certain key issues are required to be addressed before the export potential of these commodities can be achieved. For instance, processing of these products generates employment and leads to value addition and therefore, export of processed products must take priority over export of raw crops. India should also evolve a long term export policy for its agricultural products which should be stable atleast for a reasonable period of 5 years to induce confidence among our exporters. With a view to providing a boost to the sector as also exports from the sector, promotion of contract farming, training on pre-harvest and post-harvest management practices, provision of required physical and marketing infrastructure such as coldchain facilities, cargo facilities at airports/ports, and access to institutional finance for requirements of term loans and working capital. The Indian export strategy requires strict adherence to quality standards like ISO 9000 and HACCP to boost exports, rationalising the tax structure and the Food Laws so as to encourage innovation, and analyse the success achieved by other countries like Thailand, Israel, Chile and Brazil .Further, removal of product-specific and sector specific constraintswould confer much needed competitive ability to exports of Indian processed foods sector. It is concluded that the enterprises of Agriculture, Horticulture & Floriculture gained a great deal of commercialisation rather than subsisting farming on account of varied agro climatic zones and specific production technologies. Indian farmers should be backed up with quality standards, infrastructural support, education on international standards and quality conciousness. On account of trade liberalisation multitude of export opportunities prevail for horticulture and floriculture items.