Union Budget 2023: Sops to marine products cheer up the seafood industry

(Representational Image)

The Union Budget 2023 has announced certain incentives for the fisheries and marine products sector, which, the industry believes, will help reduce production cost and boost exports.

Finance Minister Nirmala Sitharaman said a sub-scheme of the PM Matsya Sampada Yojana will be launched with a targeted investment of Rs 6,000 crore to further enable activities of fishermen, fish vendors, and micro and small enterprises, improve value-chain efficiencies, and expand the market.

She also announced duty reduction for the key inputs for shrimp feed.
“The Rs 6,000-crore scheme will help provide better facilities for fishermen and raise productivity at a time when marine product exports are facing headwinds in foreign markets because of recession and other problems,’’ said Jagdish Fofandi, national president of the Seafood Exporters Association of India.

After a record export of $7.76 billion in FY22, the government had fixed a target of $8.6 billion for marine products in the current year. The seafood industry is sceptical about achieving it as shipments have slowed down in the last few months.

According to Fofandi, the decision to cut the duty for the key inputs for shrimp feed will help reduce the cost of production of aquaculture shrimp. About 70 percent of the value of marine product exports comes from aquaculture shrimp.

According to industry sources, the feed cost accounts for around 50 percent of the total cost of production.

“Our competitors, like Ecuador and Vietnam, have lower cost of production and the reduction in import duty of feed inputs will help us to compete with them better,’’ Fofandi added.

There are five main ingredients required for shrimp feed -- fish meal, krill meal, algal oil, fish oil and mineral and vitamin pre-mixes. The reduction is as much as 10-15 percent for these inputs.

“The immediate benefits will be on krill meal and algal oil. The first one is entirely imported and algal oil prices here have increased three times in the last two years,’’ said Arul Victor Suresh, president of Society of Aquaculture Professionals.

In the case of fish meal, there will be a benefit in the long term as sourcing more from the domestic market will affect sustainable fishing practices. Fish oil prices have increased but there is some restrictions in importing crude fish oil.

Though mineral pre-mixes are locally sourced, duty reduction in vitamin pre-mixes will force companies to mix it outside and import instead of mixing it in India, Suresh said.

D Ramraj, former president of All India Shrimp Hatcheries Association, said while duty concessions on feed ingredients are welcome, the budget does not have any benefit for the primary shrimp producers -- farmers and hatcheries.

Shrimp farmers had been seeking permission to import feed without duty as they say feed prices in the country are controlled by a cartel. “Since most of the shrimp produced in farms go for exports, why can’t they allow us to import feed to become more competitive,’’ said V Balasubramaniam, general secretary of Prawn Farmers Federation of India.