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Unfair trading practices in basmati exports




  • It’s an open secret now for five years, Indian traders have been passing off a lower quality rice,CSR-30, as the world’s finest long grained aromatic rice, basmati, in key markets like the US, Canada and the EU, and this with the full knowledge of the trade and the government. In the process, rice exports enjoy the duty exemption accorded to pure basmati in the EU, thousands of consumers get duped both in the domestic and export markets, and the stocks of traditional grain gets depleted on Indian farms.”
    This paragraph is from the Economic Times of India dated July 6, 2007 captioned “Basmati export leaves a bad taste in the mouth.Indian export of non-basmati rice such as Sharbetti, duplicate basmati and now CSR-30/Yamini as basmati has created a big dent in Pakistan’s foreign sales. For the price-conscious consumer, the word basmati on the bag sells, not the actual basmati quality in the bag.India now has a very strong basmati industry; they view Pakistani basmati trade not as a competitor but as merely one of the players in the supply chain.Frankly, Indian rice industry has excelled without any comparative advantage in basmati, as compared to Pakistan’s.
    India did not make a breakthrough in basmati research, they benefited from our research. While Pakistan switched from Basmati-370 to Basmati-385, India got hold of Pakistan’s Kernal Basmati and exploited it to the maximum. Pakistan only used the name Kernal by calling its new variety Super Kernal Basmati, India used the original Kernal Basmati.India dominates the branded basmati markets, although not without exceptions. Examples of such exceptions are Bestway’s presence in the UK, as well as several good Pakistani brands of basmati in the Gulf.
    Pakistan can definitely turn the tables as it has all the competitive advantage for basmati. This can also be done by exposing facts about India “basmati” exports to its consumers and also to the importing country.The CSR-30/Yamini is fine quality aromatic rice developed through crossing Pakistan basmati with BR-4/10 (Bura-rata, a salt tolerant land race from Sindh). Hence, Yemeni is also salt tolerant, and possesses some qualities of basmati. Due to this, Yemeni is quickly replacing Basmati-386 and HBC-19 (both names given to Kernel Basmati in India). In Haryana, Yemeni is called “pure Taraori Basmati.”Indian basmati traders have promoted Yemeni causing considerable damage to the Pakistani basmati market in Europe. It has done so because the DNA protocol being used in Europe cannot separate it from EU’s list of basmati varieties, which get an import tax rebate.
    Pakistan must find a Yemeni or Bura-rata specific market, to separate Yemeni from Indian basmati included in EU list. This will expose Indian trade in the international market.What is the fallout for India in the Yemeni issue? If CSR-30/Yamini is declared a basmati by India, even then as per EU tax law a tax fraud has been committed, as we all know only a few varieties from India and Pakistan are eligible for tax exemption. Moving forward, basmati labeling is covered by a code of practice developed by the Grain and Feed Trade Association (GAFTA). Two companies have been prosecuted in Britain after being charged with adulteration after using DNA evidence.In addition to finding a market for Yemeni, Pakistan also needs markets to differentiate between other non-basmati varieties of India such as Pusa Basmati and Pusa 1121, so that Pakistan can have its own library of ‘markets’ for all types of rice varieties that are being and will be grown in the region.In the parentage of Yemeni, the variety “Pakistan” is mentioned that is none other than Kernal (Pakistan) Basmati, which is also grown in India as Taraori, HBC-19, Basmati-386, Amritsari Basmati, and Karnal local”. These finding were later corroborated by the scientific community in England, “Tilda Basmati rice behaves like Traditional basmati variety Kernel” by Nottingham University Professor Malcolm Bennett.
    India has listed Basmati-386 and Taraori Basmati (HBC-19) in the EU’s list of basmati. These are actually different names of Pakistan’s “Kernal Basmati”.Furthermore, in the EU list, Basmati-217 is also listed by India as one of their basmati. In fact, it is also a Pakistani basmati but not kernel basmati as grain shape is different. The linkage of Basmati 217 to Pakistan can be verified from the FAO report titled “New avenues for augmenting and sustaining rice exports from India.”The issue has become more important as India is now in the process of patenting their commercially grown basmati varieties, which may prove to be the last nail in the coffin of Pakistani rice heritage. India has already misreported on basmati varieties to the EU and Food Standard Agency (FSA), and has misled and misinformed consumers at large.In 2002, UK’s FSA carried out DNA tests and found that only around 50 per cent of the basmati bags contained pure basmati. In the year 2006, Rice Association did a similar survey and found that around 16 per cent of the basmati was adulterated with inferior grain.TILDA, the flagship of Indian basmati now uses DNA testing to gain consumer confidence. They are also performing DNA tests all over the world and recently found an adulteration level of around 30 to 40 per cent in bags labeled as basmati. I am confident their DNA test does not separate Yemeni.At the moment, Indian basmati trade is unmatched because: They are exporting their ‘Sharbati’ as basmati, which is similar to our PK-386; Yemeni as traditional basmati to the EU; Pusa as basmati, which has none of the basmati characteristics; Pusa 1121 as basmati, which has basmati in its lineage but not in its parentage; they are growing and exporting our Kernel Basmati under different Indian names.
    The Indian government is in the final stages of diluting the requirements that enable rice to be labeled basmati in order to accommodate Pusa 1121, as they are critically short of genuine basmati. In my view, the above issue should have been raised in the commerce minister meeting between the two governments, as this is the most potent threat to our basmati industry.Pakistan has to come up with a genuine legal definition of basmati in consultation with India or separately in case India tries to dilute the definition.India’s dream of monopolising the basmati trade by shipping anything grown in India as basmati can only be shattered if Pakistan fully embraces DNA technology to check the adulteration in basmati. Finding a marker for CSR-30/Yamini to separate it from genuine basmati is the first step in this direction.

    Courtesy: The DAWN

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