Draft Agricultural Export Policy

  • The draft policy on agri export aims to push India into the list of the top 10 countries in this regard, while doubling India’s share of global export in the category.
Policy Analysis:
  • The policy paper recalls that between 2012-13 and 2016-17, the country’s agri trade dwindled from $36 billion to $31 billion, a 5 percent annual drop.
  • Our export basket is led by marine products ($5.8 billion), meat ($4 billion) and rice ($6 billion), together 52 percent of the total in agri products.
  • Despite India occupying a leading position in global trade of these products, its total agri export basket still accounts for only a little over 2 percent of world agri trade, estimated at a massive $1.37 trillion.
  • In such a scenario, the target of doubling agri export to $60 billion by 2022 is ambitious — exports have dipped in the past few years. There is a lot of scope for marine products and processed food; also in high-value products. We need to rectify domestic policies and remove transport bottlenecks.
  • The cost of transporting many products from the hinterland to ports is higher than the cost by sea; also, air cargoes need to be made affordable.
  • The policy has a significant move suggested no restrictions in the form of a minimum export price (MEP), export duty or bans on processed agri products or organic products. However, the door has been kept open for restrictions on commodities considered essential for food security.
  • Given the domestic price and production volatility of certain commodities, there has been a tendency to utilise trade policy as an instrument to attain the short-term goals of taming inflation, providing price support to farmers and protecting domestic industry.
  • Examples are MEPs on onion and rice shipments. Sudden changes in policy regarding shipment of commodities such as onion, rice, wheat, oilseed, pulses or sugar have long-term impacts on economic and foreign relations with many developing nations, the policy warns.
  • To boost high-value and value-added exports, the government will focus on perishables. It will provide an institutional mechanism for tackling market access barriers.
  • This has been India’s focus over the past few years in most bilateral negotiations. We need to create a better environment for farm export to flourish. The policy asks for reforming the Agricultural Produce Marketing Committee (APMC) laws across states.
  • The result of these, says the ministry, is that agri wholesale markets have been prey to inefficiency and cartelization. For decades, farmers have been under compulsion to sell at these official market yards, which might not offer the best price and restrict private players from setting up markets and investing in infrastructure, it concedes The policy has also identified 50 district-wise clusters for developing export-oriented infrastructure.

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top