At a time when manufacturing exports shrank by 5.95% and services grew just 1.7% in the first 8 months of the year, Commission for Agricultural Costs and Prices’ chief Ashok Gulati’s projection that agriculture could touch $42 billion in FY13 has to come as a great relief—that’s a 13.5% increase over FY12’s mammoth $37 billion. That agriculture exports are doing well is obvious when you consider they increased more than 10 times from $3.5 billion in FY91 to $37.1 billion in FY12, growing at an annual rate of 13.6%. While agricultural imports have grown faster, from $0.7 billion to $17.2 billion, the agricultural trade surplus has increased to never-before levels of $20 billion. Even better, agriculture has become very globalised with the share of exports and imports to agri-GDP rising from around 5% in FY91 when economic reforms began to 18% in FY12 (see graphics). As a result, according to a paper by Gulati, along with Surbhi Jain and Anwarul Hoda, India’s share of global agricultural exports rose from 0.8% in 1990 to 2.1% in 2011, a share which is higher than that of global merchandise exports—this rose from 0.6% to 1.7% in the same period.
Think of the huge opportunity this gives the finance minister to fix his budget deficit (http://goo.gl/UwzI7)—exporting 10 million tonnes of wheat will fetch $3 billion to the exchequer. And, since FCI stores around 16-17 million tonnes of grain out in the open (covered by a tarpaulin of uneven