Built Business Tough

Battered by rough weather, seafood sector seeks Centre’s aid

The crisis-ridden seafood sector has sought the Centre’s support for the release of ₹2,500-crore under MEIS (Merchandise Exports from India Scheme) since April last year.

MEIS refunds are pending with the government which, in turn, has put tremendous pressure on the working capital especially on MSME units in the sector, said Alex K Ninan, President of Seafood Exporters Association of India – Kerala region.

Rocketing interest rates

He added that the banks have not waived any interest or their charges during the lockdown period. Instead, they have granted only additional loans with a higher rate of interest by withholding promissory notes and personal securities unlike the government’s order.

In his Budget wish list, he said that the RBI should notify banks to extend the overdue packing credit from 120 to 180 days as a speed measure from one year and restructure the interest payments. He said that credit ratings are done by agencies like Crisil under instructions from banks and many units have been downgraded owing to the present situation. Based on the findings of the rating agencies, banks lend loans, advances and charge interest.

This has become a tool for banks to deny loans and charge higher interests.They should provide temporary working capital at subsidised rates to tide over the working capital problems and credit ratings should not be a criteria for now, he added.

Ninan added that the non-payments from importers in China has created a serious financial crisis for the seafood industry with the government not including the sector in the Kamat committee which recommended for a bank relief package of 20 per cent additional funding.

The ₹6,000-crore seafood industry in Kerala has been seriously impacted by the Covid-19 pandemic and factories are witnessing acute raw material shortage. The fishing industry is heavily dependent on high value catches of shrimp, squid, cuttle fish, octopus, clams and fishes. Hence, he urged the government to provide fishermen subsidy on diesel, fishing nets, fishing gears, financial support to equip them for venture into deep sea fishing.

The All India Shrimp Hatcheries Association said that primary producers such as hatcheries and farmers should get export benefits which is not available to them currently. D Ramraj, President of the Association, urged the government to take steps to remove the import duty on shrimp broodstock and hatchery feeds as well as reduce the aquatic quarantine fee similarly to other plant and animal quarantines.

Credit guarantee

Rajmanohar Somasundaram, CEO, Aquaconnect, suggested the creation of a credit guarantee instrument to address minimum price protection for shrimp farmers based on mutual agreement between farmers and shrimp exporters. This will insulate farmers from international price fluctuations since 99 per cent of the shrimp produced in India are exported.

“We are expecting a slew of measures from the Budget 2021 to improve the fisheries competitiveness that should focus on addressing the critical gaps in fish production and productivity, access to finance, post-harvest infrastructure and management, modernizsation of the sector, and also for the welfare of the fishers and fish farmers,”, he added.