How can Modi government double agricultural exports by 2022

Updated: January 14, 2019 6:58 AM

Extension services need to be revamped to realise the goal of agricultural exports, and investments in cold chain infrastructure need to be ramped up significantly. Also, partnering with the private sector in delivering extension services and working with state governments to deliver marketing and land reforms should be the agenda, going forward

Apart from the export policy, several other enablers are needed to make the goal of doubling agriculture exports a reality.

By Ranveer Nagaich

Significant progress can be made towards the goal of doubling farmers’ income by 2022, with a mission-mode focus on agricultural and food processing exports. Boosting exports from the agriculture and food processing sectors will provide a much-needed fillip to jobs as well. The recently released Agriculture Export Policy 2018 is a huge step in this direction. This is the first such policy in India, and it will bring much-needed stability to the agriculture export market.

There is a need for agricultural reforms that many experts have spoken of in the past. Briefly, recommendations have been submitted with regard to land leasing, contract farming, the APMC Act and the Essential Commodities Act.

Apart from the export policy, several other enablers are needed to make the goal of doubling agriculture exports a reality.

As NITI Aayog’s Strategy for New India @75 document points out, countries across the world have stringent guidelines when it comes to the import of agricultural and food processing produce. Rejections of consignments owing to non-compliance with sanitary and phytosanitary (SPS) issues are a significant bottleneck.

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A working paper published by ICRIER highlighted that Indian consignments were issued more notifications and more rejections by the European Union (EU) when compared to other countries such as Turkey, Brazil, China and Vietnam. In the past, the EU had banned import of mangoes from India, with the ban being lifted after investments in the mango export system. Similarly, there have been reports of the EU banning Indian shrimp due to presence of antibiotics. The Agriculture Export Policy 2018 provides for establishing a strong quality regimen.

Interventions at the farm or producer level are needed to meet such standards. However, with disaggregated farm holdings, there exists a great deal of heterogeneity in a single product produced by different farmers. This indicates the need for developing effective pre-harvest linkages to boost exports. Therefore, extension services will be critical to realising our agriculture export targets.

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NITI Aayog’s strategy document contains several recommendations for strengthening extension systems. Public-private partnership (PPP) in extension delivery through Krishi Vigyan Kendras (KVKs) needs to be promoted. KVKs may incubate initiatives in extension delivery by the private sector. These private sector initiatives in extension delivery should prioritise market-led extension and value-added extension. The focus should be on providing farmers with information regarding demand and supply conditions, expected prices and infrastructure availability. Likewise, value-added extension services should focus on reducing post-harvest losses and food processing activities. The National Institute of Agricultural Extension Management’s (MANAGE) dealer training programme needs to be scaled up and replicated across state agriculture universities, enabling diploma holders to conduct extension activities.
The Ashok Dalwai Committee on Doubling of Farmers’ Income championed the concept of ‘farming as a service’ (FaaS) as well. At its core, FaaS would allow farmers to convert their fixed costs into variable costs, according to a report released by Bain & Company. For example, tractors—many of our small and marginal farmers may not find it economically feasible to purchase a tractor. FaaS would enable ‘on-demand’ availability of agriculture machineries on rent. FaaS provides a great avenue for PPP in extension delivery as mentioned above.

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Whilst providing a single service may not be economically feasible, a bouquet of services should be promoted, including, for example, soil testing, extension, grading and assaying, amongst others. This is the idea behind NITI Aayog’s block-level resource centre recommendation.

Post-production, it is essential that perishable produce be properly packed, stored and transported. This is where pack houses, ripening chambers, cold storage and refrigerated (reefer) vehicles come in. As NITI Aayog’s strategy document shows, there exists a large gap in India’s cold chain infrastructure. A majority of cold storages in India are single commodity storages, which leads to them remaining idle for up to six months. Cold chain infrastructure is unevenly distributed amongst states as well. However, significant progress has been made under schemes such as SAMPADA, for example.

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According infrastructure status to agriculture value chains will provide a much-needed fillip to this sector, enabling cheaper access to finance. Similarly, the government, working with the private sector, should endeavour to set up village-level procurement centres, reducing the cost of transporting produce for farmers. Private market yards should be encouraged. Processing units that wish to establish backward linkages should partner with the government in organising sourcing through rural periodic markets.

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The Agriculture Export Policy rightfully targets a cluster-based development approach. These clusters should be supported with farmer producer organisations (FPOs) or cooperatives. Not only will this enhance bargaining power of farmers, but will also ensure consistent quality of produce when combined with revamped extension services.

Agriculture reforms have to be supported with interventions in cold chain infrastructure and extension services. Without efficient logistics, India will still grapple with the problems of high wastage and low export potential. Likewise, without strong extension services, consistency in quality and conformity to quality standards may not be achieved.

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Significant investment is needed in this sector over the next five years. The private sector needs to be made an active partner to bridge this gap. We now have a conducive policy environment for private investment in agriculture. The Agriculture Export Policy is a major step in this direction. The SAMPADA scheme is bridging the infrastructure gap. Partnering with the private sector in delivering extension services and working with state governments to deliver marketing and land reforms should be the agenda, going forward.

-The author is Young Professional to Vice-Chairman, NITI Aayog. Views are personal

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