Kochi: Shrimp farmers have a reason to heave a sigh of relief now that their produce has been recognized as an agricultural product and stands to reap the benefits extended to the sector, such as lower freight rates and higher returns on exports.

Following a directive from the director general of foreign trade, shrimp export has been included under the Vishesh Krishi Gram Udyog Yojana and exporters will be eligible to a duty repayment of 3.5% of the on-board freight of the commodity exported.

The move will help lift sagging exports of Indian black tiger shrimp, which have fallen by Rs560 crore to about Rs3,800 crore in fiscal 2008 primarily due to an anti-dumping duty in the US and a market dominated by the cheaper vanammei variety.

The inclusion of shrimp under the scheme will be a boost to the industry, especially for aquaculture farmers who plan to start farming along the eastern coast this time, said P. Brahmanandan, managing director of export house Devi Seafoods.

The average price of Rs230-240 per kg for shrimp will certainly go up since the industry has to pass on the benefit of the scheme to the farmers, he said.

Anwar Hashim, national president of the Seafood Exporters Association of India, said that though the government has agreed to consider only shrimp under the scheme, this is still a welcome move as shrimp exports make up more than 50% of India’s total marine exports worth about Rs8,000 crore.

The scheme, evolved by the commerce ministry to promote the export of agricultural products including fruits, vegetables and dairy products, is in effect from 1 September 2004 to 31 March 2009.

The government had earlier considered including only aquaculture under the scheme, but fears of manipulation forced it to include export of shrimp caught from the seas as well, Hashim said. He added that the shrimp industry would have to pass on the benefit of the duty repayment to farmers and fishermen, and that in turn will lead to a better return on their produce.

The duty entitlement passbook scheme, under which exporters get an 8% duty repayment on the FOB or free on board value of exported merchandise, has been extended beyond 31 March, he said.