Untapped Potential : Exporting Agri-Inputs – UPSC GS3

Context

1) Seeds

• India can emerge as an important seed producer and a large exporter of seeds to many developing countries in South and South-east Asia as well as Africa.
• The country can produce very competitively-priced seeds for hybrid rice, hybrid corn, hybrid Bt HT cotton, and several vegetables including tomato, potato and okra.
• For this to happen, we have to set our regulatory system right.
• Let’s use the case of cotton.
• India’s decision in March 2002 to allow Bt cotton made India the largest producer of cotton in the world and the second-largest exporter of cotton by 2013-14.
• But due to policy changes since 2014-15 and issues such as trait fees companies stopped the introduction of new generation of seeds
• Now there is an “illegal” spread of Bt HT cotton in Maharashtra.
• This is partly because our regulatory system is complex.
• And more so because the present government has ideological blinkers against modern science.
• This is the biggest bottleneck holding India back from becoming the seed capital of the developing world.

2) Fertilisers

• India has been a net importer of fertiliser nutrients (NPK) for almost two decades.
• In 2019-20, India imported fertilisers worth $6.7 billion, topping the list is urea $2.9 billion.
• We are totally dependent on imports and likely to remain so in case of MOP and in the case of DAP.
•  In the case of urea, India wants to be atmanirbhar by opening up five new urea plants in the public sector with a total capacity of 6.35 MMT.
• Almost 70 per cent of the gas being used in urea plants is imported at a price much higher than the price of domestic gas.
• The cost is going to be more than $400/tonne when the international price generally hovers between $250-300/tonne.
• The government should allow existing private sector urea plants to expand and produce at a much lower cost.
• The best way to achieve self-reliance in fertilisers is to change the system of fertiliser subsidies.

Suggestion on changes in fertiliser subsidies

• Deposit equivalent cash directly into farmers’ accounts, calculated on a per hectare basis.
• Free up fertiliser prices.
• Allow the private sector plants to compete and expand urea production in a cost-competitive manner.

3) Farm machinery

• Before the Green Revolution, India produced only 880 tractor units.
• It increased to about 9,00,000 units in 2018-19.
• So, India is the largest tractor manufacturer in the world.
• India also exported almost 92,000 tractors, largely to African and ASEAN countries.
• Though Green Revolution gave tractor production a push, the real break-through came after de-licensing in 1991.
• The new class of entrepreneurs and start-ups are coming up with special apps for “Uberisation of tractor services”.
• In an economy of small landholders, owning a tractor is a high-cost proposition as it is not fully utilised.
• This needs to be made more efficient by creating a market for tractor services.

Conclusion