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Draft Agriculture Export Policy

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March 22, 2018

Why in news?

A new Draft Agriculture Export Policy was released recently by the Ministry of Commerce and Industry.

What are the objectives?

  • The 'National Agriculture Export Policy' is formulated in line with the vision to double the farmers' income by 2022.
  • It is also towards the goal of increasing the share of agricultural exports from present about USD 30 billion to over USD 60 billion.
  • Getting to one of the top 10 exporting countries of agricultural products is also one of the goals.

What are the concerns addressed?

  • Trade - India is today a leading global producer of foodgrain, dairy and several horticultural crops.
  • But it holds a minuscule 2.2% share in global agri-exports.
  • It is stuck at the lowest rung of the value chain, and India’s farm exports are highly reliant on a handful of commodities.
  • These include marine products, meat, rice and plantation crops.
  • Shortfalls - Exports even in these items are frequently interrupted by self-imposed and arbitrary trade curbs.
  • State-level curbs on movement of produce add to already high costs from fragmented farms and poor logistics.
  • High rejection rates on consignments due to poor quality, antibiotic and pesticide residues and other phyto-sanitary grounds are major concerns.
  • Farmers - Bumper crops continued to trigger a meltdown in food prices.
  • Policy interventions such as e-Nam and the repeal of the APMC Acts by States have made scant progress.
  • Policy - Domestic price and production volatility of certain agricultural commodities lead to using the existing policy for short-term goals.
  • These include taming inflation, providing price support to farmers and protecting the domestic industry.
  • These decisions may serve the immediate purpose of maintaining domestic price equilibrium.
  • However, they end up distorting India's image in international trade as a long term and reliable supplier.
  • It is thus imperative to frame a stable and predictable policy.

What are the key recommendations?

  • Infrastructure - The policy stresses on improving the infrastructure, and storage and exit point logistics.
  • It suggested a comprehensive need-gap analysis of existing export oriented infrastructure across the value chain for this.
  • R&D - The policy emphasised promoting R&D activities for new product development for the upcoming markets.
  • Increased focus on R&D, new varieties and state of the art lab for effective accreditation and monitoring is called for.
  • This will be part of the efforts towards establishing a strong quality regime.
  • Besides, the policy stressed the need to ensure greater interaction between the various research organizations and industry bodies.
  • Exports - The policy aims to boost high value and value added agricultural exports, focusing on perishables.
  • Improving the institutional mechanism for tackling market access barriers is suggested as a measure.
  • Dealing with sanitary and phytosanitary issues are also the priorities.
  • Processed agricultural products and all kinds of organic products will not be brought under any kind of export restriction.
  • APMC - Monopoly of the Agricultural Produce Market Committee (APMC) is a long existing concern.
  • It prevents private players from setting up markets and investing in market infrastructure.
  • APMC across states have not been able to achieve farmers' welfare envisaged in these acts.
  • The policy hinted at continuing the efforts with state governments to remove perishables from their APMC Acts.
  • It also suggested better coordination between central ministries that are now working at cross-purposes.
  • Mandi - State governments would also be urged to standardize/ rationalize mandi taxes for largely exported agricultural products.
  • Simplification or uniformity of mandi/agricultural fee across states will create a transparent supply chain.
  • This will empower the farmers, providing wider access to markets and enabling free trade across the country.
  • Products - It is proposed that the agricultural export policy must focus on promotion of value added, indigenous and tribal products.
  • Development of organic export zones/organic Food park with an integrated approach is suggested to help promote shipments.
  • Agency - 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.
  • The draft policy considered working towards bringing in similar agencies in India.
  • Besides the policy made a case for promoting contract farming as it would help in attracting investments.
  • Some of the other notable recommendations include:
  1. promotion of region-specific clusters for lucrative crops
  2. coordinated branding efforts
  3. a shared database for exporters on market intelligence and export rejects
  4. quality assurance at the farm
  5. wider adoption of land leases

 

Source: Economic Times, BusinessLine

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