Why in news?
A new Draft Agriculture Export Policy was released recently by the Ministry of Commerce and Industry.
What are the objectives?
- The 'National Agriculture Export Policy' is formulated in line with the vision to double the farmers' income by 2022.
- It is also towards the goal of increasing the share of agricultural exports from present about USD 30 billion to over USD 60 billion.
- Getting to one of the top 10 exporting countries of agricultural products is also one of the goals.
What are the concerns addressed?
- Trade - India is today a leading global producer of foodgrain, dairy and several horticultural crops.
- But it holds a minuscule 2.2% share in global agri-exports.
- It is stuck at the lowest rung of the value chain, and India’s farm exports are highly reliant on a handful of commodities.
- These include marine products, meat, rice and plantation crops.
- Shortfalls - Exports even in these items are frequently interrupted by self-imposed and arbitrary trade curbs.
- State-level curbs on movement of produce add to already high costs from fragmented farms and poor logistics.
- High rejection rates on consignments due to poor quality, antibiotic and pesticide residues and other phyto-sanitary grounds are major concerns.
- Farmers - Bumper crops continued to trigger a meltdown in food prices.
- Policy interventions such as e-Nam and the repeal of the APMC Acts by States have made scant progress.
- Policy - Domestic price and production volatility of certain agricultural commodities lead to using the existing policy for short-term goals.
- These include taming inflation, providing price support to farmers and protecting the domestic industry.
- These decisions may serve the immediate purpose of maintaining domestic price equilibrium.
- However, they end up distorting India's image in international trade as a long term and reliable supplier.
- It is thus imperative to frame a stable and predictable policy.
What are the key recommendations?
- Infrastructure - The policy stresses on improving the infrastructure, and storage and exit point logistics.
- It suggested a comprehensive need-gap analysis of existing export oriented infrastructure across the value chain for this.
- R&D - The policy emphasised promoting R&D activities for new product development for the upcoming markets.
- Increased focus on R&D, new varieties and state of the art lab for effective accreditation and monitoring is called for.
- This will be part of the efforts towards establishing a strong quality regime.
- Besides, the policy stressed the need to ensure greater interaction between the various research organizations and industry bodies.
- Exports - The policy aims to boost high value and value added agricultural exports, focusing on perishables.
- Improving the institutional mechanism for tackling market access barriers is suggested as a measure.
- Dealing with sanitary and phytosanitary issues are also the priorities.
- Processed agricultural products and all kinds of organic products will not be brought under any kind of export restriction.
- APMC - Monopoly of the Agricultural Produce Market Committee (APMC) is a long existing concern.
- It prevents private players from setting up markets and investing in market infrastructure.
- APMC across states have not been able to achieve farmers' welfare envisaged in these acts.
- The policy hinted at continuing the efforts with state governments to remove perishables from their APMC Acts.
- It also suggested better coordination between central ministries that are now working at cross-purposes.
- Mandi - State governments would also be urged to standardize/ rationalize mandi taxes for largely exported agricultural products.
- Simplification or uniformity of mandi/agricultural fee across states will create a transparent supply chain.
- This will empower the farmers, providing wider access to markets and enabling free trade across the country.
- Products - It is proposed that the agricultural export policy must focus on promotion of value added, indigenous and tribal products.
- Development of organic export zones/organic Food park with an integrated approach is suggested to help promote shipments.
- Agency - Global bodies like US FDA and European Food Safety Authority are empowered to frame, regulate and implement policies related to both agricultural production and trade.
- The draft policy considered working towards bringing in similar agencies in India.
- Besides the policy made a case for promoting contract farming as it would help in attracting investments.
- Some of the other notable recommendations include:
- promotion of region-specific clusters for lucrative crops
- coordinated branding efforts
- a shared database for exporters on market intelligence and export rejects
- quality assurance at the farm
- wider adoption of land leases
Source: Economic Times, BusinessLine
