Brief No. 15, August 2015

Electronic traceability of agricultural products in India:

the case of GrapeNet

Agricultural trade is a pillar for the sustainableeconomic growth of many developing

countries and least developed countries (LDCs)in Asia. Increased demand for fresh fruits,vegetables, cut flowers and plants in the EuropeanUnion (EU), Japan and North America creates newopportunities for export. However, trade ofperishable products remains a challenge, asexporters from developing countries in the regionfind it difficult to meet the requirements of highimport standards and regulations. Manydeveloping countries fall behind in developingand implementing food safety and traceabilitystandards. Nevertheless, some countries havebeen able to make the necessary regulatory,technical and administrative investments requiredto meet the demands of high-income exportmarkets.

In the agricultural trade policy framework,traceability is part of public and privateprocedures for monitoring the conformity toquality, environmental and other specificationsrelated to food. Through food traceability systems,supply chain actors and regulatory authorities cantrack a food safety or quality issue and introduceprocedures to remedy it. The benefits oftraceability for consumers, governments andlarge businesses are well recognized. Yet forsmall-scale farmers, especially those producinghorticultural and other fresh food products indeveloping countries, traceability requirementscan constitute barriers to trade.

GrapeNet is an example of how electronic traceabilityapplied to the grape sector in India has been used to enablesmall producers in the country to participate ininternational trade. The GrapeNet initiative was launchedin 2006 and has ever since helped to raise Europeanimporters’ confidence in fresh grape imports from India byenabling the monitoring of pesticide residue and byachieving product standardization. These measures haveboosted Indian grape exports to the countries of theEuropean Union.

This Brief introduces India’s experience in implementingGrapeNet, an IT-enabled traceability system for the grapesector in India. The Brief describes how GrapeNet hasemerged to address challenges of the sector in the country,approaches taken in its implementation and its majorfunctions and services. The Brief also highlights the benefitsand major success factors in the process of implementingGrapeNet and concludes by outlining the furtherdevelopment of similar traceability systems for otheragricultural products.

The grape sector in India

According to the National Horticulture Board of India, grapes are grown across 116,000 hectares, occupying 1.7%of India’s total cultivated area. India is also a major global exporter of grapes. During 2012-13, India’s global exportof grapes reached 1,726,000 metric tons, with a value of RS 12.5 billion1 and accounted for 6.83% of India’s totalgrape production. Grape is a high profit crop for growers, yet grape production is quite challenging due to theprevalence of crop diseases; the need for sustainable use of crop protection products, food safety issues related tochemical residues and the dynamics of the international market requirements of retail chains.

In 2006, GrapeNet – a monitoring software witha centralized database to meet internationalstandards for the export of grapes – was launchedfor Indian fresh fruit exporters. The systemintegrated all stakeholders, clearlycommunicating the Indian Government’s tradeprocedure regulations for the grape sector;providing trainings on the fulfillment ofrequirements; mobilizing government andprivate sector inspection and testing institutionsto collaborate; and producing the requireddocumentation for importers.

APEDA then issued a Regulation of Export ofFresh Grapes from India to the European Unionthrough Monitoring of Pesticide Residues whichmade the use of GrapeNet compulsory for Indiangrape exports to the EU.

Traceability is especially important if problemsarise along the supply chain and food productsmust be recalled. Recent EU legislation alsoobliges producers to disclose any potentialconsumer’s risks deriving from their products.Many other countries are raising the standardsof their own legislation on food safety.Likewise, individual growers, producers andmanufacturers eager to protect their brands fromthe harm of being associated with taintedmaterials or poorly managed recalls, areboosting their own internal recall policies andmethodologies.

Traceability and the introduction of GrapeNet

Traceability2 of products and ingredients is a clearlegal requirement to access an increasing number ofmarkets in developed countries. Traceability systemsenable concerned stakeholders to track the movementof a product along the food chain ensuring thecontinuity of the product’s information flows andproviding verifiable record keeping anddocumentation.

To stay competitive, fresh fruit and vegetable growersand exporters in general need to adhere to theserequirements concerning food systems, offeringtraceable products which are demonstrably free ofcontamination at or below maximum residue levels(MRLs).

In 2003, India’s APEDA3 initiated an in-depth analysisof the requirements for the import of grapes from Indiainto different EU markets. A key recommendation tofacilitate grapes exports included the developmentof a shared Information and CommunicationTechnology (ICT) platform functioning as a SingleWindow, as well as a data harmonization mechanismfor exports. The greatest complexity in developing acommon system was the large number of stakeholdersinvolved in the supply chain of grapes export. Thesestakeholders included farmers, state horticulturedepartments, packaging houses, exporters, testinglaboratories, phytosanitary departments and APEDA.

1 RS 1 equals US$ 0.02. Source: http://www.oanda.com/currency/average2 Defined as the ability to “trace thehistory, application or location of an entityby means of recorded identifications”(ISO8402) or “to follow the movement ofa food through specified stage(s) ofproduction, processing and distribution”(Codex Alimentarius).3 Agricultural and Processed FoodProducts Export Development Authority(APEDA).

GrapeNet’s stakeholders

Exporters, packaging houses, processing plants, laboratories and stategovernment departments are direct stakeholders of APEDA, while farmersare indirect users through state agriculture and horticulture departments.ICT is used to integrate smallholders to international supply chains. Byreaching out to farmers, packaging houses, selling units, processing unitsand others, GrapeNet is introducing transparency in information flow,regulation and monitoring – effectively improving the overall efficiency ofthe supply chain.

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GrapeNet processes and services

1. Software Development: The softwareapplication was developed for registration,inspection, residue testing, consignment creation,online applications and was hosted on the webserver of APEDA.

Implementing traceability technologies for food safety and other purposes comes with a series of challenges in datacollection, processes, technological solutions, business models, costs and learning. APEDA is committed tomaintaining and offering an increasing number of services through its website as a virtual office available 24/7.

GrapeNet was developed in consultation with State Horticulture Department, APEDA, the National ResearchCentre for Grapes (NCRG), grape growers and exporters as a ‘total traceability’ software. The development of thesystem included several initial and ongoing steps:

2. Expert Involvement: Experts from APEDA,NRCG and the State Horticulture Department wereinvolved for scientific inputs in the softwaredevelopment. They designed a model garden forexports and uploaded sample recommendations onGrapeNet based on inspection reports.

3. Capacity Building: Knowledge updating offield staff is regularly carried out via pre-seasonaland mid-seasonal trainings at NRCG level. Trainedstaff carry out farm trainings for grape growers. Thefeedback from trainings is communicated to theexperts for further improvement of the system andtrainings.

4. Registration: Registration of exportable grapegardens is done yearly between October andDecember. Interested grape growers apply onlineand a 12 digit registration number is assigned toeach farm.

5. Inspection: There are two mandatoryinspections of grape gardens for EU export. The firstis performed at the time of a new registration, withyearly renewals. The second one takes place beforesampling of grapes for residue analysis, as requiredfor export. Reports are updated online.

6. Residue Analysis: For sampling and residueanalysis APEDA’s accredited residues laboratorieshave been authorized for sampling of grapes fromregistered and recommended grape gardens. Uponanalysis of samples, results are updated online onGrapeNet by the laboratory.

7. Agmark Certification: Following the receipt ofpositive laboratory test results and with the consentof the grape grower(s), the export process continueswith the harvest of registered grape garden. Theproduce is stocked at APEDA accredited stockinghouses. Exporters create consignment ID’s for gradingcertificates and forward their applications to theAgmark authorized laboratory online. After Agmark’svalidation, a grading certificate is assigned to theconsignment and the former is issued online throughGrapeNet.

8. Phytosanitary Certification: Phytosanitarycertificates are issued by State HorticultureDepartment officers. Agmark certified consignmentapplications are given to the Phytosanitary Certificate(PSC) Authority online. After physical verification ofconsignment and if found free from pests and disease,a phytosanitary certificate is processed online anda signed copy of the pre-printed certificate is issuedto the exporter. This enables full traceability of theproduct shipment.

9. Public Awareness: Registration and PSCauthorities organize public awareness campaigns atthe district level through the press and electronicmedia.

10. State Level Steering Committee: This committeeformed under the chairmanship of the director ofAPEDA involves stakeholder consultation informulating guidelines, reviews and project updatesand suggests policy changes to Government.

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GrapeNet key features

GrapeNet implements end-to-end monitoring of pesticide residues and adherence to product standardsand facilitates tracing from imports to farms of the Indian growers. This covers farming, sampling, testing,certification and packing/logistics.

This software can be easily used anywhere and anytime by all authorized stakeholders. The followingstakeholders have been granted access to use GrapeNet: APEDA registered exporters, packaging houses,laboratories, the State Horticulture Department, Agmark Department, Phytosanitary Department and theNational Referral Laboratory.

The software has reduced duplication in data capture and enables instant reference of previous steps inthe supply chain. The in-built checks and balances in the software ensure that the subsequent steps canbe carried out only if all previous ones are successfully completed. No document can be issued withoutgoing through the software. Finally and most importantly, APEDA can trace details of the consignmentright up to the plot level.

FLOW CHART FROM REGISTRATION TO EXPORT

** PSC – Phytosanitary Certificate* CAG – Certificate of Agmark Grading

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Technical specifications of the software

GrapeNet application was developed usingMicrosoft’s ASP.NET platform and Microsoft SQLServer RDBMS. The application uses AJAXtechniques in order to make the user experience veryresponsive. The CSS look and feel as beenincorporated as well as JavaScript for front-endvalidations. Likewise, the software uses salted MD5authentication and generates PDF files for e-mailingpurposes. Logicsoft played a major role towardsdeveloping and maintaining the software.

Benefits of GrapeNet

GrapeNet has been a breakthrough initiative in India.In fact, it is the first IT platform of its kind in India tobe applied – and on such a large scale – in theagriculture sector. Various ICT tools were used tocreate a systematic and transparent process and toensure traceability throughout the supply chain. Inthis way, all the stakeholders were organized andconnected under one Single Window from farmer tothe trader.

Besides this, the system also promotes a culture ofzero paper work and 360-degree accountability,including towards farmers who traditionally havelimited access to market information. The system isavailable to smallholder farmers at a very competitivecost. The registration and communication areconducted in the local language.

Since its introduction, GrapeNet has succeeded inincreasing the implementation of Good AgriculturalPractices (GAP) among farmers and promoting valueaddition through exports as well as higher quality(grading) products for domestic markets. The price ofIndian grapes in the international market has alsoconsiderably increased, reflecting the improvedquality of the produce.

Moreover, national authorities have accredited thelaboratories registered in the system, which usestate of the art technologies and procedures.Standardization of quality parameters forinternational markets took place across both publicand private laboratories.

The initiative of the Indian Government built theconfidence of all stakeholders involved. In particular,the system succeeded in building the trust ofEU markets thanks to the transparency and efficiency

of GrapeNet. The platform facilitates theimplementation of various requirements of EUlegislation for imports.

Another benefit reportedly linked to the common useof the platform and to the enhanced flow andinformation-sharing has been a better allocation andprioritization of resources from the different Indiangovernment departments involved along the supplychain.

Overall, GrapeNet has been able to deployadvanced, yet user-friendly software that can bedeveloped and replicated in other sectors.

Positive impact of GrapeNet

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GrapeNet funding model

The Indian Government initially funded theGrapeNet model. As of March 2015, there are morethan 20,000 farmers registered in GrapeNet with anaverage of 3,000 containers shipped to Europe perseason.

Today the model is funded broadly through thefollowing sources:

1) Farmer registration as well renewal fees: RS 50/-

2) Phytosanitary certificate (Exporter) fees: RS 172/-

3) Agmark certification fees: 0.01% of FOB value.

4) Sample testing by farmer or exporter: RS 8,000/sample

5) Software maintenance fees: approx.RS 425,000 + taxes.

Benefits for farmers and local stakeholders

GrapeNet helps producers address some of the mostcommon barriers experienced by Small and MediumEnterprises (SMEs) in agricultural trade such as: costs ofstandards and certification (GlobalGAP, HAACP, CodexAlimentarius), implementation of required traceabilitysystems, compliance with regulatory and controlrequirements (SPS, quarantine, fumigation, importlicenses, export licenses), compliance with food safetyand health requirements (food recall systems),additional infrastructure requirements, customsclearance procedures and logistics and technicalcapacity.

Indian fruit and vegetable crops suffer from high levelsof wastage and rejection; there is no protection againstfluctuations in price and the local markets are eitherabsent or too small to absorb such high-value andperishable produce. Thus, agriculture can be a high-riskbusiness for smallholders. GrapeNet provides thenecessary market linkages to make it a viable venture.

Famers, who have been part of the GrapeNet initiative,better understand the importance of working within acollaborative structure. The knowledge base and inputsgained from agri-officers and exporters throughGrapeNet have given them larger exposure to theimportance of standards and procedures and trainingrequired to upgrade their knowledge. Those who usedto follow conventional farming methods are nowadopting scientific cultivation approaches, new tools,irrigation systems and post-harvest techniques to get thedesired quality and yield results. The farmers who havebeen supplying grapes for export have become localrole models in their communities promoting changes incultivation techniques and transfer of knowledge andtechnologies.

Small producers now better understand scientificpesticide residue management concepts like MRLs, Pre-Harvest Level (PHLs), Label Claims and EconomicThreshold Levels (ETLs). Many of them now opt for eco-friendly pesticide substances and pesticide demand byfarmers is now need-based instead of supplier-driven.All of this has resulted in cost reductions and increasesin net returns.

Proper packaging and handling has been introduced inconjunction with improved transportation of theproduce from fields to packaging houses or domesticmarkets, reducing product waste and losses.

Farmers have realized the importance connectingdirectly with customers in domestic markets aswell as in export markets. Similarly, theelimination of middlemen has increased theirincome and living standards.

As a result of the overall developments and betterincomes, the children of the farmers are staying intheir villages to continue the family business.Furthermore, many families are making grapeproduction their primary source of income.

Benefits for exporters

GrapeNet provides grape exporters and importerswith access to information and resources availableat government level on a single integrated platform.Such resources include information from researchlab experts; packaging institutions; farmers’ data ontheir products; industry information and statistics onexports. Teams of experts and a wide range ofinformation can be found and used by exporterswithout large investment.

The MRL data generated through GrapeNet provideskey information for exporters. Traders can noweasily monitor pesticide residues and traceconsignments from the farm to the shelf. There iseffective monitoring and reduction in the number ofdocuments. The exporter now has a readyknowledge base regarding the availability of fruitand varieties in various pockets of the countrythroughout the year and season, with expectedproduction volumes and harvest time, whichsupports the planning of exports or domesticdistribution.

For perishable produce, exporters’ time is the mostcritical factor. The identification of registeredfarmers’ plots is now performed and updated in thegovernment system by agriculture officers at thevillage or district level. This saves initial costs relatedto manpower, training, data collection, travel time,and data updating. Likewise, in cases of detection ofresidue at the importers end, the rejection isrestricted to the specific batch instead of the fullconsignment. Thereafter, the rejected batch or farmcan be studied and improved during succeedingdispatches.

The ease of tracing the origin of the produce throughthe government system builds the confidence ofboth exporters and farmers to make investmentdecisions for their business and farming activities.

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Government benefits and support

GrapeNet is helping many small and largeentrepreneurs in the perishable produce business toseize new opportunities and to improve their currentmarket options and generate more exports.

Numerous government agencies including APEDA,Ministry of Food Processing Industries (MOFPI),National Horticulture Board (NCB), Department ofScience and Technology (DST) and Quality Council ofIndia (QCI) have come together to extend theirfinancial support and assistance to the grape sectorsupply chain through GrapeNet. APEDA, NHB andMOFPI are responsible for supporting the exporters.On the one hand, APEDA provides support forinfrastructure and logistics in the form of assistance forthe purchase of specialized transport units forhorticulture of up to 25% of the cost subject toa ceiling of RS 250,000 per beneficiary. On theother hand, NHB extends support for refrigeratedvans, special transport vehicles, cold storageand Controlled Atmosphere (CA)/ModifiedAtmosphere (MA) Storage through its CapitalInvestment Subsidy Scheme for Construction/Expansion/Modernization of Cold Storages forhorticulture produce not exceeding 25% of theproject cost with a maximum limit of RS 5 millionper project. The system is helping integrate andmobilize various government resources, in termsof infrastructure like packaging houses, scientificexpertise and manpower of agriculturedepartments at the village level that currently existbut are neither well-coordinated nor being usedoptimally.

Greater stakeholder awareness has also increased thestandards of quality of the produce for domesticmarkets. Large domestic stores and multinationalsfood companies in India have benefitted from thisprocess and have been ready to pay higher prices forregular quality supply. As the importance of 24/7availability of farmers’ data is increasingly beingrealized by local, domestic and internationalindustries, several foreign companies have begun totake the initiative in creating strategic partnerships toimprove their reach to rural Indian areas throughvarious business models. The success achieved inimplementing the residue monitoring system and IT-based traceability procedure has enabled allstakeholders in India, as well as importers andsupermarkets in the EU to develop substantialconfidence in Indian grapes, and allowed grapeexports from India to go up considerably.

Lessons learned

1. The cooperation among agencies andstakeholders was key in finding solutions tofacilitate traceability and therefore exports.

2. An integrated online platform like GrapeNet hasthe potential to improve efficiency, informationasymmetries, communication flows andtransparency, as well as allowing targetedproblem management.

3. Database generation and maintenance servedas a tool for planning future strategies in thegrape sector.

4. Information on standards for food productionand trade networks often does not trickle downto the farms and workers, resulting in lack ofcompliance.

Moving forward

The GrapeNet model has encouraged stakeholders in other agriculture products to replicate its success. Thishas led to the establishment of traceability systems for pomegranates (AnnarNet), organic products (TraceNet) – as the first traceability system in the world implemented at the national level with around 500,000farmers registered – and peanuts (Peanut Net). Likewise in 2015, MangoNet registration also started formango growers and a similar system is under development for all fruits and vegetables (HortiNet).

India’s GrapeNet system has become a landmark achievement for food safety in the agriculture sector,serving as an exemplary model for all developing countries for increasing their agriculture export share andimproving socio-economic growth.

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This Brief was prepared by Ms. Danashree Shuklaas a lead author supported by Ms. Elisa Sabbion ofUNESCAP. The paper was reviewed, edited andpublished by the Trade Facilitation Section ofUNESCAP on behalf of UNNExT and it has beenissued without formal editing. The note expressesthe opinion of the authors and should not beconstrued as representing the opinion of theUnited Nations.

We welcome your feedback as well as expressionsof interest in our work on trade facilitation. Forfurther information on UNNExT, please write toDirector, Trade and Investment Division,UNESCAP.

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