Agriculture Export Policy 2018

The government, in December, approved the policy for agriculture, lifting all restrictions on organic and processed food under which the norms for sensitive farm goods such as onions will be reviewed from time to time.

The 'Agriculture Export Policy, 2018' seeks to double farm exports to $60 billion by 2022 from $30 billion last year, and will invest Rs 1,400 crore to set up specialised clusters in different states for different produce to push exports.

 

Objective and Vision of Agriculture Export Policy

A dynamic nation of 1.3 billion consumers with rising discretionary incomes, changing food patterns, vast farming area, diverse agriculture and a large population dependent on agriculture has propelled India to the world's center stage as a big consumer market and also as a key supplier of food products. It has often been suggested that an essential element of "Make in India" has to be "Bake in India", i.e. a renewed focus on value addition and on processed agricultural products. The rapidly growing global population and shrinking farmlands, coupled with changing socio-economic, agroclimatic and dietary patterns, have challenged scientists and policymakers to reconsider how we grow and feed 7.5 billion global citizens. India's quest, then, is to grow sustainably, trade abundantly and progress harmoniously. Agriculture export, if properly supported by infrastructure, institutional back up, packaging, freight transport and connected to the internal production system backed by market access will be in a position to transform the agricultural economy.

 

Challenges, however, are aplenty; from low farm productivity to poor infrastructure to global price volatility to market access. There has been a long felt need for a dedicated agricultural export policy in India.

The need for a dedicated policy under Department of Commerce (DoC) overarching umbrella arises due to the federal and administrative structure of the Union and State government. While the Department of Agriculture, Cooperation and Farmer Welfare (DAC&FW) and Department of Animal Husbandry, Dairying and Fisheries (DAHDF) focus on production, pre-harvest and boosting farmer income, the Ministry of Food Processing Industries (MoFPI) focuses on value addition, post-harvest losses and employment generation. The DoC, on the other hand, is focused on foreign trade across sectors. There is an increasing need for the Government of India to establish a stable and predictable Agriculture Export Policy which aims at reinvigorating the entire value chain from export oriented farm production and processing to transportation, infrastructure and market access. The Agriculture Export Policy has to be dovetailed with existing framework for agriculture and surplus agricultural produce. There is a symbiotic relationship between a framework for sustainable agriculture on the one hand and a viable Agriculture Export Policy on the other. There is a need to craft a policy that will deliver incomes into the pockets of farmer through crucial export opportunities.

The Agriculture Export Policy is framed with a focus on agriculture export oriented production, export promotion, better farmer realization and synchronization within policies and programmes of Government of India. It is required to have a "Farmers' Centric Approach" for improved income through value addition at source itself which will help to minimize losses across the value chain. India needs to have farmer oriented strategy to achieve the twin objective of food security and a prominent agriculture exporter of the world. The policy will also give a big push to food processing/manufacturing to have much higher growth in food production which will increase India's share of value added processed products in its Agriculture export basket at the global level. The broad objectives and vision is highlighted below.

 

Objectives of Agricultural Export Policy

- To double agricultural exports from present ~US$ 30+ Billion to ~US$ 60+ Billion by 2022 and reach US$ 100 Billion in the next few years thereafter, with a stable trade policy regime.

- To diversify our export basket, destinations and boost high value and value added agricultural exports including focus on perishables.

-  To promote novel, indigenous, organic, ethnic, traditional and non-traditional Agri products exports.

- To provide an institutional mechanism for pursuing market access, tackling barriers and deal with sanitary and phytosanitary issues.

- To strive to double India's share in world agri exports by integrating with global value chain at the earliest.

- Enable farmers to get benefit of export opportunities in overseas market.

 

Vision of Agricultural Export Policy

Harness export potential of Indian agriculture, through suitable policy instruments, to make India global power in agriculture and raise farmers income.

 

Elements of the Agriculture Export Policy Framework

The policy recommendations in this report are organized in two broad categories:

strategic and operational. The salient features of the agricultural export policy are highlighted below and discussed in greater detail in subsequent sub-sections.

Strategic

Policy Measures

Infrastructure and Logistics Support

Holistic Approach to boost exports

Greater involvement of State Governments in Agri Exports

 

Operational

Focus on Clusters

Promoting Value added exports

Marketing and promotion of "Brand India"

Attract private investments into production and processing

Establishment of Strong Quality Regimen

Research & Development

Miscellaneous

 

Strategic Recommendations for Agricultural Export Policy

Policy Measures

Discussions with public and private stakeholders across the agricultural value chain highlighted certain structural changes that were required to boost agricultural exports. These comprise of both general and commodity specific measures that may be urgently taken and at little to no financial cost. The subsequent gains, however, are aplenty.

 

Stable Trade Policy Regime

Given the domestic price and production volatility of certain agricultural commodities, there has been a tendency to utilize trade policy as an instrument to attain short term goals of taming inflation. Such circumstantial measures are often product and sector specific, for instance, the adhoc ban or imposition of Minimum Export Price (MEP) for onion and non-Basmati rice exports. This breaks export supply chains and affects India's image as a reliable suppliers affecting price realization for Indian produce. The country is seen as a source of high quality agricultural products and changes in export regime on ground of domestic price fluctuations, religious and cultural belief can have long term repercussions.

Such measures require constant fine tuning and keeps the market anxious which often leads to price shocks. While these decisions may serve the immediate purpose of maintaining domestic price stability, they end up distorting India's image in international trade as a long term and reliable supplier. It is imperative to frame a stable and predictable policy with limited State interference to send a positive signal to the international market. It is necessary to refrain from making a distinction between the products meant for export and those for domestic consumption. One way to do this is to decide that export restrictions/bans would be resorted to only in the rarest circumstances. This alone will provide the farmer some confidence to plan for the overseas market. Policy measures should assure farmers to respond to market signals with confidence and redirect resources towards products that will earn higher returns.


Aims of Agri Export Policy

1) Providing assurance that the processed agricultural products and all kinds of organic products will not be brought under the ambit of any kind of export restriction (viz.

Minimum Export Price, Export duty, Export bans, Export quota, Export capping, Export permit etc.) even though the primary agricultural product or non-organic agricultural product is brought under some kind of export restrictions.

2) Identification of a few commodities which are essential for food security in consultation with the relevant stakeholders and Ministries. Any export restriction on such identified commodities under extreme price situation will be based on decision of a high level committee. Also, any kind of export prohibitions and restrictions on the identified commodities above would be taken up in a WTO compatible manner.

3). Liberalised import of agricultural products for value addition and re-export.

The government has approved an outlay of Rs 206.8 crore for 2019-19 for a central sector scheme titled 'Implementation of Agriculture Export Policy' aimed at doubling farmers' income by 2022.

"The Central Government has approved a Central Sector Scheme titled 'Implementation of Agriculture Export Policy'," the government said in a notification.

Of this, Rs 134.50 crore are allocated to setup dedicated clusters for mangoes, pomegranate, bananas, grapes, tea, coffee, turmeric, and marine products, among others along with pre and post-harvest management of the production, upgrading the supply chain to attain much higher levels of export from those clusters.

The approved scheme also entails outlay for post-harvest infrastructure in clusters, capacity building, grant towards Public Private Partnership for Integrated Agriculture Development (PPP-IAD) and laboratories.

 

Website: http://agriculture.gov.in/