In a major leg up to PM Narendra Modi's dream of doubling farmers' income by 2022, the farm exports have risen dramatically, reversing the trend of falling trade surpluses in the last three years.
Providing a major fillip to PM Narendra Modi’s dream of doubling farmers’ income by 2022, the farm exports have risen dramatically, reversing the trend of falling trade surpluses in the last three years. Agricultural trade surplus, i.e exports minus imports relating to farm commodities has improved in 2017-18 and also the first quarter of this fiscal, after deteriorating in the last three years. According to data released by the Commerce Ministry, India exported agricultural commodities worth $38.74 billion, as against imports of $24.89 billion, in fiscal year 2018.
Farm trade surplus in the year of $13.85 billion was higher than the $8.05 billion and $10.23 billion figures for 2016-17 and 2015-16, respectively. However, the figures were below the $ 17.93 billion in 2014-15, the first year of the Narendra Modi-led government, and the all-time-high of $ 27.72 billion in 2013-14, the last year of the Congress-led United Progressive Alliance (UPA) regime.
Notably, the period between 2003-04 and 2013-14, roughly corresponding with the UPA regime (both 1 and 2), saw a near six-fold jump in India’s farm exports, from $ 7.53 billion to $43.25 billion. According to a report in the Indian Express, the primary driver was the global commodity boom, with the United Nations’ Food and Agricultural Organization’s Food Price Index (base year 2002-04=100) soaring from an average of 97.7 in 2003 to 229.9 in 2011.
High international prices for various commodities provided a fillip to shipments of to various products including spices, coffee, tea, cashew, tobacco, oil-meals and rice, which constituted India’s traditional agri-commodity export basket. An interesting trend in India’s exports is the rise in the spectacular rise in exports of commodities that weren’t as significant at the start of the century. There are four notable items in the list- buffalo meat, guar-gum, raw cotton and corn.
India has risen from nowhere to become the world’s largest bovine meat exporter — rising from a mere $ 341.43 million in 2003-04 to $ 4.35 billion in 2013-14 and peaking at $4.78 billion in the first year of the Modi government — had partly to do with spiraling global prices, more so during 2009-14, said the Indian Express report.
In case of guar-gum, exports zoomed from from just $ 110.53 million in 2003-04 to $ 3.92 billion in 2012-13. The main driver for such an unprecedented rise is attributable to oil, more specifically the US shale boom. The said gum — extracted from the seeds of guar, a hardy legume crop grown mostly in Rajasthan — is used as a thickening agent in the fracking fluid (primarily water and suspended sands) that gets injected at high pressure into shale rocks to create cracks and allow the oil/gas to flow through them, noted the newspaper.
In the case of cotton, in 2011-12, India became the world’s No 2 cotton exporter after the US, even as the value of exports ($ 4.33 billion) far surpassed that of imports ($ 223.18 million).
Corn exports have also seen a massive rise. Corn shipments had skyrocketed to 4.79 million tonnes (mt) and $ 1.31 billion, respectively, as the likes of Cargill and Louis Dreyfus resorted to sourcing maize from Bihar’s Kosi-Seemanchal belt and even Nabarangpur in Odisha — farmers there had taken to planting high-yielding single-cross hybrids bred by DuPont and Monsanto — for dispatching to Indonesia, Malaysia and Vietnam via Kakinada and Visakhapatnam ports.
Going forward, a depreciating rupee and global commodity prices coming off their lows (the FAO Food Price Index in June 2018 was 173.7) should further aid the cause of Indian farmers. This will help the Indian economy to move ahead in the latest era of ‘permanent surpluses.’