Draft agricultural export policy targets ambitious growth, stable regime

Photo: Shutterstock
The promise of no further restrictions on processed agricultural export, a stable export policy regime for farm products and streamlining of the current APMC laws are part of the changes suggested to double agri export to $60 billion by 2022. Issued on Monday by the commerce and industry ministry, 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. 

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 per cent annual drop. Our export basket is led by marine products ($5.8 billion), meat ($4 billion) and rice ($6 billion), together 52 per cent 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 per cent 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. Doable if the government is serious about these, says Gokul Patnaik, president of the All India Food Processors Association. “For example, 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 hinterland to ports is higher than the cost by sea; also, air cargoes need to be made affordable,” he said.

The policy has in 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,” the policy says. 

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", a senior commerce ministry official said. 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 cartelisation. 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.

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel