Agriculture policy: Why export push is critical to doubling of farm incomes

 

The value of India’s agricultural exports, no doubt, grew from about $ 7.5 billion to $ 43.25 billion between 2003-04 and 2013-14, but that was largely on the back of a global commodity boom. When that boom ended, exports fell to $ 33.7 billion by 2016-17, before recovering somewhat to $ 39.2 billion in 2018-19. The occasional spike in shipments of certain produce has often been short-lived primarily because of the peculiar nature of the demand for that commodity — for instance, that of guar-gum from the US shale gas and oil industry.

 

The existing state of our agri-exports clearly does not augur well for the ambitious goals for the sector set by the Narendra Modi government. Doubling of farmers’ incomes by 2022 isn’t possible without concomitant measures taken for boosting exports. Hence, developing a robust and sustained market for our farm exports is the need of the hour.

 

Here are some steps that we recommend would contribute to an export push:

 

Unified institutional approach: At present, agricultural exports are in too many hands. What is required is an apex agriculture export promotion authority led by a technocrat, in place of the current multiplicity of export mandated agencies, from APEDA, MPEDA and Cashew Export Promotion Council to the various commodity boards. A single well-funded authority under the Ministry of Commerce and Industry can help devise national programs and policies to boost agriculture export. It could work in close collaboration with similar agriculture export councils at the state level, apart from industry & trade associations and newly-appointed agricultural counselors of Indian embassies in all important countries. The apex export authority would have a clear mandate of generating and disseminating market intelligence, creating demand and obtaining market access for Indian farm produce, and devising strategies for multilateral/bilateral dispute settlement and trade-related matters. The existing commodity boards and agencies should become industry-controlled bodies on the lines of the All India Rice Exporters’ Association and the Maharashtra State Grapes Growers Association, independent of any direct government involvement.

 

Testing infrastructure: Agricultural export products are subjected to sanitary (human and animal health-related) and phytosanitary (plant health) checks. The very rigorous safety regulations often demanded on produce from importing countries include their originating from certified disease-free areas and adhering to prescribed standards pertaining to pesticide MRLs (maximum residue limits), use of permissible additives, and special treatment in processing. Strict compliance with these standards is paramount for fresh fruits, vegetables, and other agri produce in order to avoid rejections and develop confidence of trading partners.

 

Putting in place proper infrastructure for sampling, testing, safety assessment and traceability is a must for harnessing the country’s export potential in perishable and non-perishable agricultural, animal, marine and processed food products. Establishing an APEDA-supported National Referral Laboratory (NRL) at the Indian Council Agricultural Research’s National Research Centre for Grapes, Pune in 2004 for monitoring pesticide residues in export consignments is a good example of what good research & development support can do.

 

This NRL has been crucial to enabling export of fresh grapes from India, which was valued at $ 334.78 million (Rs 2,335.25 crore) in 2018-19 alone. If India is to double its agricultural exports, there should be at least four such NRLs, one for each region, dedicated to the testing of exportable produce. Each NRL can cater to the requirements of units in all the agri export clusters of the particular region. These could be complemented by the creation of large-scale processing and pack-house facilities adjacent to inland dry depots or designated airports having export cargo handling infrastructure. A recently established integrated agri export hub at Varanasi, with a supply chain linking four farmer producer organisations (FPO) in the region with the Mumbai-based Vafa Fresh Vegetables & Fruits Exporters Association, is a model worth replicating across different agri clusters.

 

A vegan agenda: A big chunk of India’s agri exports now comprises cereals (basmati and non-basmati rice), meat and marine products. We have hardly exploited the huge potential for export of fresh and processed fruits & vegetables (F&V), which can be a game-changer in meeting the goal of doubling farmers’ incomes. This is even more so, given that F&V is produced mostly by smallholders across a very diverse portfolio and spread over a vast geography. Recent policy interventions with regard to the adoption of a model Agricultural Produce and Livestock Marketing Act, e-NAM (electronic-National Agricultural Market), FPOs and the Varanasi agri export hub model can go some way in overcoming the bottleneck of aggregation, processing and packaging of produce for the export market.

 

Additionally, the government should emphasise on registration, standardisation and promotion of specialty products with proper GI (geographical indication) protection. Today, we have Darjeeling tea, which is the only such protected GI product in the European Union market. As of 2019, the Indian government has issued 322 GI tags under the Geographical Indications of Goods (Registration and Protection) Act, 1999, which includes 120 food items. What stops us from unlocking an exclusive export market for Indian GI-protected agri-products? Doing this even for a dozen of the 120 protected produce can be an excellent beginning.

 

In summary, creating a single apex authority for promoting agricultural exports, encouraging exporters to use the e-NAM platform for sourcing export-quality produce, engaging FPOs in aggregation and linking them with exporters, and establishing robust infrastructure, including NRLs, at identified agri-export hubs are some of our critical asks. The Finance Minister and Commerce & Industry Minister, in particular, could do well in pushing these steps that can help achieve the twin objectives of doubling agricultural exports and farm incomes by 2022.