Shaping Agri Export Policy: What Cabinet Can Discuss?

The Union Cabinet is likely to take up agriculture export policy in the first week of December. The proposed agriculture export policy aims at doubling outbound shipments of farm products and increasing their share in the world market, The Commerce Ministry having already finalized the policy and forwarded it for the consideration by the Government. 

The emphasis is likely to be on all aspects of agricultural exports, including modernizing infrastructure, streamlining regulations, curtailing knee-jerk decisions, standardization of products, focusing on research and development activities, and 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 proposed National Agriculture Export Policy also needs to 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 etc.

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 liberalizing land leasing to double the agricultural shipments to over USD 60 billion by 2022. It has also pitched for greater participation of states, enhancement in infrastructure and logistics and research and development (R&D) activities for new product development for the upcoming markets. There has been a penchant to utilize current norms as an instrument to attain short-term goals of taming inflation, providing price support to farmers and protecting the domestic industry, given the domestic price and production volatility of certain agricultural commodities.

Precise forecasting of agri production would benefit a lot and even occasional shortfall should be met through imports rather than restraining exports. Freight subsidy for value-added agri products, floriculture and horticulture would be of enormous support.   India’s exports in 2017 was about USD 35 billion, which is over 2.2 per cent of the world agriculture trade.  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. However the worrying factor is that exports of value-added items is significantly low.

The proposed policy advocates for adoption of a cluster based approach for agriculture commodity exports so that quality products can be exported. The clusters will now be also concentrating to produce world class products which complies with the international phytosanitary standards.

What Cabinet must include?

Mapping Food Product for each specific food importing economy: This will facilitate in analyzing the kind of food/agricultural produce India needs to cultivate / process to cater to the demand of individual economy.

Reverse Engineering Approach: Instead of identifying the potential product which Indian region is specialized in cultivating, we need to cultivate and process such products that are required and imported by specific food importing economies, including synergy on SPS and TBT and Codex Alimentarius. In a pre-determined manner, cultivation will take place from stage 1 taking care about the exports requirement of a particular Economy / Market.

Agricultural Enclaves can also be considered as part of a bigger value chain mechanism (raw materials, intermediates, finished products and marketing) where the value chain extends beyond geographically defined boundaries.

ATP Agreement: There is an agreement, adopted by no less than 20 countries, titled “Agreement on the International Carriage of Perishable Foodstuffs and on the Special Equipment to be used for Such Carriage” “(ATP)”. Its purpose is to direct participants to follow common standards for the temperature-controlled equipment (road vehicles, railway wagons, containers etc.) within Europe, thereby facilitating international traffic in certain perishable foodstuffs.

The Cabinet decision addressing and approving these issues is crucial for India to speed up the pace in adopting the modern practices, to be implemented in agricultural exports, to fetch the desired export figures.