The draft national agriculture trade policy has sought a stable trade policy regime with limited government interference for key farm items — including the politically-sensitive onion and pulses — as it suggested measures to double the country’s farm exports to over $60 billion by 2022.

Reforms in the APMC Act, streamlining of mandi fee and liberalisation of land leasing norms are among the raft of measures suggested in the draft policy, formulated by the commerce ministry aimed at helping realise the government’s goal of doubling farmers’ income by 2022.

“…changes in export regime on ground of domestic price fluctuations, religious and social belief can have long-term repercussions. This is particularly important for commodities such as onions, rice, wheat, oilseeds, pulses and sugar,” it said. Also, the policy is aimed at providing an assurance that processed agricultural products and all kinds of organic products will not be brought under the ambit of any kind of export restrictions, including the imposition of minimum export price, export duty and an outright ban.

India had imposed a ban on export of wheat in 2007 and on non-basmati rice in 2008. Although the ban on rice and wheat exports was lifted in 2011, it came too late for wheat traders to exploit the advantage of a massive drought in key supplier Russia and others in the Black Sea region. The government has resorted to impose curbs on onion exports almost every year and periodically slapped restriction on cotton and sugar exports as well. An export ban on key pulses and oil seeds was in effect for a long time. However, in recent years, the fluctuations in farm trade policy have reduced considerably.

The draft policy also pitched for high-value and value-added agricultural exports, focusing on perishables, apart from setting up an institutional mechanism to deal with barriers to market access and sanitary and phytosanitary issues.

It has also advocated greater involvement of states, improvement in infrastructure and logistics and promotion of R&D activities for new product development for the upcoming markets as essential ingredients of the renewed push to farm exports.

Elaborating on the stable trade policy regime, the policy said given the domestic price and production volatility of certain agricultural commodities, there has been a tendency to utilise the policy as an instrument to attain short-term goals of taming inflation, providing price support to farmers and protecting the domestic industry. Such 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, it said.

The draft policy also said that monopoly of the Agricultural Produce Market Committee (APMC) prevents private players from setting up markets and investing in market infrastructure. However, while some states have scrapped the archaic APMC Act, analysts have pointed out that the absence of an alternative market for the sale of produce has hurt farmers even more.
“Efforts will continue with state governments to remove perishables from their APMC Act. State governments would also be urged to standardise/ rationalise mandi taxes for largely exported agricultural products,” it added.

Simplification or uniformity of mandi/agricultural fee across states will create a transparent supply chain that will empower the farmer, provide him wider access to markets and enable free trade across the country, it said.

The policy made a string case for promoting contract farming as it would help in attracting investments.

It also said that as global bodies like US FDA and European Food Safety Authority are empowered to frame, regulate and implement policies related to both agricultural production and trade, it may be worthwhile to explore such arrangement in India as well.

The draft policy said that there is a need to ensure greater interaction between the various research organisations and industry bodies which will enable the research bodies to work on industry specific requirements.

The Department of Commerce has sought views of the stakeholders on the draft till April 5.