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Are Indian Farmers Ready To Explore International Markets?
−− Lack of know-how regarding international markets and consumers, infrastructural constraints, and pesticide residues in produce are holding back Indian farmers from fully integrating into global supply chains
Dec. 9, 2019
There are substantial opportunities for Indian agricultural and processed food sector, which saw a growth of 7 percent to Rs 1.28 lakh crore in the 2018-19 fiscal year.
This increase has been skewed as products like dairy, pulses and sugar have witnessed growth whereas wheat and non-basmati rice showed a steep decline with fierce price competition from Russia, Brazil and other countries in the global market. With vast agricultural potential and significant demand of Indian produce among consumers, India is yet to harness the full potential in the global agricultural and food markets.
The new Indian agricultural export policy aims to double agricultural exports from the present $30 billion to $60 billion by 2022 and attain a market size of $100 billion in the next few years. Additionally, India aims to diversify its export basket and boost high value- and value-added agricultural exports, with a focus on perishables, processed food and organic food by entering global value chains.
The huge potential in commodities such as spices, dairy, perishables and standards-compliant food could turn out to be a huge revenue earner for Indian farmers. Yet there are many hurdles which Indian farmers have to cross before they are fully integrated into global supply chains.
The lack of know-how about foreign markets and consumers, coupled with stringent quantitative and qualitative restrictions, make access to international markets difficult. There is definitely a need to look into the food consumption patterns of target markets vis-a-vis Indian produce.
Synchronisation of Indian production regimes with target markets in terms of counter-seasonality, quality, consumer behaviour and technical barriers to trade can help attain our targets of enhancing exports and doubling farmers’ incomes.
Institutions at various ministries, export-promotion councils, commodity boards and industry associations have facilitated trade through capacity building, setting up of new agri-export zones and good agricultural practices. The growing amount of export rejections from various countries also lead to losses for farmers. In 2015, the EU rejected Indian grape consignments due to the use of a banned chemical, as a result of which scientists at the National Research Centre for Grapes trained farmers in the appropriate use of pesticides through a software called Grapenet.
As the agri-export policy is being implemented, we need strategic initiatives such as collective branding of produce from India. Here, it is noteworthy to mention that at one point, the brand Mahagrapes worked in favour of farmers and markets both. There is also a need to have a consumer-centric approach and build a knowledge-reservoir system that works on the basis of synchronisation with domestic markets.
India should be bold enough to enter into bilateral and multi-lateral free-trade agreements based on mutual access to agricultural markets, particularly with countries where the products are complementary and farming seasons do not overlap due to seasonal variation, such as Australia and New Zealand. Additionally, India should partner with developed economies possessing advanced technological know-how, such as Australia and Israel, to increase farm productivity, produce quality, standardisation and certification, and target to jointly export to developing countries (particularly in eastern Asia and Africa) for maximum market access.
On the operational front, future actions must include strengthening export infrastructure: investment in cold chains, logistics, etc. Identification of export clusters might help in pushing high-value commodities where we have already identified niche markets as well as production zones and specialised container facilities. The development of integrated food processing facilities might help in pushing processed food, which occupies minimal share in India’s exports. In order to overcome quality hurdles, advanced specialised capacity building programmes for farmers might help. Specialised training programmes refer to those targeted at specific commodities and specific markets.
Training in good agricultural practices, climate-smart agriculture, agri-input usage, modern packaging facilities, pre-harvest and post-harvest management practices in line with importing country requirements are important. The government of India has recently joined hands with Standards and Trade Development Facility, Geneva, to train spice farmers on the use of quality planting material and inputs in line with international market requirements.
A national contaminant and residue monitoring programme is also proposed to boost spice exports. Investments through public-private partnerships could prove beneficial in this regard. Unless we bridge the gap between farmers and markets through world-class knowledge and technologies—AI, GIS, remote sensing—backed by appropriate policy measures in both agriculture and exports ministries, we will not be able to build a farmer-centric and consumer-friendly trade regime.
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