The Union Cabinet is expected to consider this week the proposed agriculture export policy, which aims at doubling outbound shipments of farm products and increasing their share in the world market, an official said. The commerce ministry has finalised the policy and has forwarded it for the consideration of the Cabinet. The proposed policy would focus on all aspects of agricultural exports including modernising infrastructure, standardisation of products, streamlining regulations, curtailing knee-jerk decisions, focusing on research and development activities, setting up of an agency in line with the European Food Safety Authority for framing, regulating and implementing rules related to both production and trade.
The draft policy, prepared by the ministry, has suggested bringing in a stable trade policy regime, reforming the APMC (Agricultural Produce Market Committee) Act, streamlining of Mandi fee, and liberalising land leasing to double the agricultural shipments to over USD 60 billion by 2022. It has also pitched for greater involvement of states, improvement in infrastructure and logistics and promotion of research and development (R&D) activities for new product development for the upcoming markets.
The proposed National Agriculture Export Policy would also provide an assurance that the processed agricultural products and all kinds of organic goods will not be brought under the ambit of any kind of export restriction such as imposing minimum export price, export duty and ban. Given the domestic price and production volatility of certain agricultural commodities, there has been a tendency to utilise current norms as an instrument to attain short-term goals of taming inflation, providing price support to farmers and protecting the domestic industry. The draft has stated that such knee-jerk decisions may serve the immediate purpose of maintaining domestic price equilibrium, but they end up distorting India’s image in international trade as a long-term and reliable supplier. Against this backdrop, it was imperative to frame a stable and predictable policy with limited state interference to send a positive signal to the international market.
The draft has also recommended setting up of a strong quality regime and focus on strong R&D, new varieties, modern laboratories for effective accreditation and monitoring of products. Agricultural products constitute over 10 per cent of the country’s total merchandise exports. The main commodities exported by India include tea, coffee, rice, cereals, tobacco, spices, cashew, oil meals, fruits and vegetables, marine products, meat, dairy and poultry products. Exports of value-added items are significantly low.
India’s exports in 2017 were about USD 31 billion, which is over 2 per cent of the world agriculture trade. The Federation of Indian Export Organisations (FIEO) said that the stability of a policy is key to success of agri exports as “switch on and off policy” in the past has deprived India to be considered at a reliable supplier. “Accurate forecasting of agri production would help a lot and even occasional shortfall should be met through imports rather than curtailing exports. Freight subsidy for value-added agri products, floriculture and horticulture would be of immense help,” FIEO President Ganesh Kumar Gupta said.