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
