To arrest the fall in rural income growth, the government has decided to be more liberal with the export of farm items...
To arrest the fall in rural income growth, the government has decided to be more liberal with the export of farm items and put in place a stable policy. The idea is that farmers, who have in recent years seen a moderation in the increase in minimum support prices (MSP), be compensated with better opportunity to sell products in the export markets.
Agricultural exports, which had surged from $17.7 billion in 2009-10 to $42.7 billion in 2013-14 but fell to $39 billion in 2014-15, would get a fillip with the new policy. Sources said once the practice of transient export bans and curbs are minimised, farmers will get the confidence to boost production and the agricultural products processing sector will be able to make value-added items, resulting in much higher export earnings for the country.
The commerce ministry officials said to a certain extent, shortcomings in the agri export policy have already been addressed but there is a need to make further headway in this regard. At present, export of pulses (barring kabuli chana and organic lentil) and edible oil (in bulk) are banned. These could be removed in phases, said sources.
Edible oil exports were allowed in 2013 in 5kg packs (to promote value-addition of Indian brands) with a minimum export price fixed at $1,500 a tonne and then MEP was brought down to $900 a tonne in February this year. A plan to increase area under pulses and oilseeds, and enhance value-added exports is on the cards.
Speaking to FE, Ashok Gulati, professor for agriculture at ICRIER and former chairman of the Commission for Agricultural Costs and Prices, said the government must ensure better price support operations for oilseeds and pulses. The MSP policy must be dovetailed with the trade policy to make sure the landed (import) costs of these items are not be below the MSP, he said.
Simultaneously, the government is preparing a list of market-access barriers (non-tariff barriers such as sanitary and phyto sanitary measures, packaging norms along with high tariff) and market denials (outright bans) in overseas markets that hamper its agricultural exports. The plan is to take these issues up more strongly with the key importing countries. The government recently took up the issue of import ban and restrictions on Indian farm items with trading partners such as Vietnam (ban on Indian peanuts), China (yet to allow market access to Indian non-basmati rice), Saudi Ariabia (ban on Indian green pepper), Iran (general ban on rice imports) and European Union (ban on Indian snake gourd, bitter gourd, aubergine and colocasia leaves).
The government is also compiling more information on 60 Agri Export Zones (AEXs). The AEZ concept, launched in 2001, has not yet taken off as the government has not allocated enough funds. The government is planning to revamp the policy with a focus on value-added exports. On May 11, the government had organised first outreach programme (in Mumbai) with exporters of farm products to inform them about the plan of a ‘stable export policy’ and elicit their responses on the problems they face in India and overseas. More such events are on the anvil.