India’s agriculture exports will have to grow at a compounded annual growth rate of 25% over the next 3 years to achieve the target of doubling farm export by 2022, which is crucial to the target of doubling farmers' income by 2022.
The NDA government is facing a daunting task to meet Prime Minister Narendra Modi’s ambitious target of doubling farm exports to $60 billion by 2022.
India’s export of agriculture and allied products was 16% lower in 2017-18 compared with the peak of $32.95 achieved in 2013-14, according to commerce ministry data. The ambitious target looks even more diificult with the exports growing at a paltry 1.19% in the first seven months of the current financial year.
“It’s difficult, but achievable,” says agriculture economist Ashok Vishandass.
“We are very competitive in rice, fruits and vegetables, milk products and meat,” said Mr Vishandass, who was chief technical advisor of United Nations’ Food and Agriculture Organisation, in New Delhi.
India’s agriculture exports will have to grow at a compounded annual growth rate of 25% over the next three years to achieve the target of doubling farm export by 2022, which is crucial to the target of doubling farmers’ income by 2022, promised by the Prime Minister in his Independence Day speech in August 2017.
Mr Vishandass said incomes are growing world over and because of this people are moving away from vegetarian diet to more nutritious meat-based diet and this is the need gap that India can exploit.
Boosting farmers’ income through exports:
According to United Nation’s Food and Agriculture Organisation’s (FAO) data, global agricultural trade has grown at an average rate of 6% per year between 2000 to 2016 and total global trade of farm products trebled from $570 billion to $1.6 trillion during this period.
Mr Vishandass, former chairman of the Commission for Agricultural Costs & Prices (CACP) told FE Online that India has no dearth of products but it needs sound policies to achieve the growth.
Talking about the central role played by ministry of commerce, he said, “Government policies can dramatically increase or decrease the export of agro products.”
The target to double farmer’s income in next five years requires a sustained compound growth rate of 15% over the next five years and target to double India’s farm export requires a sustained compound growth rate of 25% per year to take it to the figure of $60 billion.
A tall order
After assuming office in 2014, Prime Minister had realised that prosperity will not percolate down, especially to rural areas, unless India moves away from services driven economy that accounts for more than half of India’s gross domestic product.
He tried to achieve the goal by way of encouraging allied activities like dairy, poultry, honeybee keeping, sea-weed farming, herbal products and organic farming.
In his speeches, he has kept urging the policy makers and farming community for value addition of raw agro products as perhaps this is the only viable model to actually double the farmer’s income in five years.
Prime Minister Modi also pushed for integration of farmers with markets, through e-Nam or e-mandi to set them free from the clutches of middlemen, however, given the average growth rate of 2.5% in agriculture sector in the last four years, it is clear much more needs to be done.