Commerce and Industry Ministry has expressed its determination to expand the Agri exports.
What is the status of Indian Agri exports?
In general, both agri exports and imports have increased substantially since 2004-05.
As a share of the agri-GDP, the contribution of this trade increased from 11.1 % in 2004-05 to 16.7 % in 2016-17.
This reflected the increasing integration of Indian agriculture with global markets.
However, Agri-trade surplus fell dramatically by 2016-17.
This fall in agri-trade surplus is the result of falling exports and rising imports.
What are the reasons?
Agri-exports suffered primarily due to the significant fall in exports of cereals (especially wheat and maize), cotton, and oilseeds.
This, in turn, was largely due to a steep fall in global prices and restrictive export policies.
Export policies for pulses, oilseeds/edible oils and several vegetables were getting restrictive.
However, exports of fish-seafood, and fruits-nuts-vegetables have been growing steadily.
What are the necessary policy corrections?
India needs to build global value-chains for some important agri-commodities in which the country has a comparative advantage.
The country can also become competitive in groundnut and mustard oil production, provided there is an open, stable and reliable export policy.
Few exports would require infrastructure and institutional support connecting export houses directly to farmer producer organisations (FPOs).
A special package to support value-chains through infrastructural investments which will also create jobs in rural areas is essential.
On the imports front, policy must be designed such that the landed price of good never goes much below the domestic prices of their nearest rivals.
Long land-lease arrangements can facilitate private investments in building export-oriented global value-chains, generating rural non-farm employment and enhancing farmers’ incomes.
