CWC chief flags ‘malpractices’ in phytosanitary certification, pitches integrated logistics to boost agri-exports
2-minute summary
The Central Warehousing Corporation (CWC) is planning to transition from conventional warehousing to integrated agricultural logistics to address the high rate of export rejections. CWC Managing Director Santosh Sinha highlighted concerns over 'malpractices' in phytosanitary certification at ports, which have led to high-profile rejections of Indian agricultural products, such as rice at Chinese ports and mangoes in Japan. To counter this, CWC aims to integrate storage, preservation, grading, sorting, treatment, and cold storage with direct port connectivity. Highlighting its technical expertise, CWC noted that its storage losses are kept below 0.5% for its 50–60 lakh tonnes of foodgrain capacity. Additionally, CWC is investing in cutting-edge technology, including a ₹23-crore pilot project with IIT Madras-incubated TuTr Hyperloop to test a 650-metre cargo hyperloop system at the JNPT CFS Logistics Park in Mumbai, utilizing a Linear Induction Motor-based system to move containers.
Why it's in the news
The Managing Director of the Central Warehousing Corporation (CWC) flagged malpractices in phytosanitary certifications at ports and announced CWC's expansion into integrated logistics and high-tech solutions, including a pioneering Hyperloop cargo trial at JNPT.
Background and context
India is one of the world's largest producers of agricultural commodities, yet its share in global agri-exports remains low due to high logistics costs, fragmented supply chains, and frequent rejections on quality grounds. Under the World Trade Organization (WTO) framework, member countries can enforce Sanitary and Phytosanitary (SPS) measures to protect human, animal, or plant health. However, these are frequently utilized as non-tariff barriers. Indian exports of mangoes, table grapes, and rice have historically faced bans or rejections in markets like the EU, US, Japan, and China due to pesticide residues, pest infestations, or certification discrepancies. The Central Warehousing Corporation (CWC), a statutory public sector undertaking established under the Warehousing Corporations Act, 1962, is attempting to leverage its technical storage expertise to provide end-to-end, certified, and contamination-free logistics corridors to resolve these bottlenecks.
Constitutional provisions
- Seventh Schedule (Article 246) — Entry 33 of the Concurrent List deals with trade and commerce in, and the production, supply, and distribution of, domestic and imported products of agriculture.
- Article 301 — Guarantees freedom of trade, commerce, and intercourse throughout the territory of India, which is impacted by interstate and export logistics infrastructure.
Committees and reports
- Dalwai Committee on Doubling Farmers' Income — Emphasized the critical need for robust post-harvest logistics, cold chains, and integrated value chains to minimize losses and boost export competitiveness.
- National Logistics Policy (NLP) — Aims to reduce logistics costs in India from ~13-14% of GDP to single digits, promoting integrated transport and digital logistics systems.
Government schemes
- Agriculture Infrastructure Fund (AIF) — Provides medium-to-long term debt financing facility for investment in viable projects for post-harvest management infrastructure and community farming assets.
- Trade Infrastructure for Export Scheme (TIES) — Assists Central and State Government agencies in the creation of appropriate infrastructure for the growth of exports.
International organisations
- World Trade Organization (WTO) - SPS Agreement — Sets the multilateral framework of rules governing sanitary and phytosanitary measures to ensure they do not create unnecessary obstacles to international trade.
- International Plant Protection Convention (IPPC) — A multilateral treaty that aims to secure coordinated, effective action to prevent and to control the introduction and spread of pests of plants and plant products.
Previous UPSC questions on this theme
- Mains GS-3 2022 — What are the main bottlenecks in upstream and downstream process of marketing of agricultural products in India?
Mains practice: Sanitary and Phytosanitary (SPS) measures often act as non-tariff barriers to India's agricultural exports. In this context, discuss the challenges in India's agri-export logistics and how integrated warehousing can mitigate these issues.
Sanitary and Phytosanitary (SPS) measures under the WTO framework are designed to protect human, animal, and plant health. However, they are increasingly utilized by importing nations as non-tariff barriers, leading to frequent rejections of Indian agricultural consignments, such as rice and mangoes.
• **Key Challenges in India's Agri-Export Logistics:**
1. **Fragmented Supply Chain:** The lack of seamless, temperature-controlled cold chains from farm to port leads to qualitative degradation and pest infestations during transit.
2. **Certification and Quality Assurance Gaps:** Malpractices, lack of standardization, and inadequate testing facilities at ports lead to faulty phytosanitary certifications, which fail to meet strict international standards.
3. **High Post-Harvest Losses:** Traditional warehousing lacks advanced preservation techniques, resulting in high moisture retention and pest vulnerability.
4. **High Logistics Costs:** Indian logistics costs hover around 13-14% of GDP, making agricultural exports less price-competitive globally.
• **Role of Integrated Warehousing in Mitigating These Issues:**
1. **End-to-End Value Addition:** Transitioning from conventional storage to integrated logistics allows warehouses to offer grading, sorting, cold storage, and specialized phytosanitary treatments (such as irradiation and fumigation) under one roof.
2. **Technical Preservation Expertise:** Utilizing scientific storage methods can reduce storage losses to negligible levels (below 0.5%, as demonstrated by CWC), ensuring the physical integrity of commodities.
3. **Enhanced Traceability:** Integrated systems can leverage digital tracking and blockchain to provide farm-to-fork traceability, assuring importing nations of pesticide-free cultivation.
4. **Direct Port Connectivity & Tech Adoption:** Developing dedicated freight corridors, container freight stations (CFS), and adopting advanced transport systems like Hyperloop can drastically reduce transit times and contamination risks.
In conclusion, upgrading India's warehousing infrastructure into integrated, tech-enabled logistics hubs is vital to overcome SPS barriers, build global trust in 'Brand India', and realize the goal of doubling agricultural exports.
Prelims practice questions
Q1. With reference to the Central Warehousing Corporation (CWC), consider the following statements: 1. It is a statutory body established under the Warehousing Corporations Act, 1962. 2. It functions under the administrative control of the Ministry of Agriculture and Farmers Welfare. Which of the statements given above is/are correct?
- 1 only
- 2 only
- Both 1 and 2
- Neither 1 nor 2
Answer: A. Statement 1 is correct: CWC is a statutory body established under the Warehousing Corporations Act, 1962. Statement 2 is incorrect: It functions under the Ministry of Consumer Affairs, Food and Public Distribution, not the Ministry of Agriculture and Farmers Welfare.
Q2. The 'Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement)' is associated with which of the following international organizations?
- Food and Agriculture Organization (FAO)
- United Nations Environment Programme (UNEP)
- World Health Organization (WHO)
- World Trade Organization (WTO)
Answer: D. The SPS Agreement is an international treaty of the World Trade Organization (WTO) that sets constraints on member-states' policies relating to food safety as well as animal and plant health import regulations.
Q3. With reference to the logistics sector in India, the 'TuTr Hyperloop' project recently in the news is being developed in collaboration with which of the following institutions?
- IIT Bombay
- IIT Madras
- IISc Bangalore
- IIT Delhi
Answer: B. TuTr Hyperloop is an IIT Madras-incubated startup. The Central Warehousing Corporation (CWC) has partnered with it to fund and test India's first hyperloop cargo freight trial at its CFS Logistics Park at JNPT, Mumbai.
Revision flashcards
- What is the statutory origin of the Central Warehousing Corporation (CWC)? It was established under the Warehousing Corporations Act, 1962, and operates under the Ministry of Consumer Affairs, Food and Public Distribution.
- What are Sanitary and Phytosanitary (SPS) measures under the WTO? They are regulations aimed at protecting human, animal, or plant life from risks associated with pests, diseases, toxins, or additives in food and feed.
- Where is India's first hyperloop cargo freight trial planned to take place? At the Central Warehousing Corporation's (CWC) CFS Logistics Park at JNPT, Mumbai, in partnership with IIT Madras-incubated TuTr Hyperloop.
- What is the primary technology used in the planned CWC hyperloop cargo pilot? A Linear Induction Motor-based system designed to move containers over a 650-metre pilot track.
- How does integrated warehousing help reduce agricultural export rejections? By combining storage, preservation, grading, sorting, phytosanitary treatment, and cold storage with direct, secure port connectivity to prevent contamination and quality deterioration.