By Debesh Roy
Accomplishment of the $5-trillion financial system purpose by India could be pushed by a couple of many years from the authentic deadline of 2024-25, due to the pandemic-induced recession through 2020-21. Only a V-formed recovery throughout 2021-22, and a sustainable advancement of 9% for each annum more than the future five a long time, can turbocharge the economic system to contact the $5-trillion mark. The agricultural sector, which contributes 14.6% to the economic climate, needs to assist this aim by focusing on private financial commitment and exports, while concentrating on an once-a-year agri-GVA development of 5%. A concentration on reforms in agri-marketing and advertising and agri-exports, alongside with the marketing of large-tech, digital and precision agriculture, is an correct recipe for transforming the agricultural sector, although doubling farmers’ earnings, in a realistic time-body.
India ranks among the top 10 exporters of agricultural solutions in the environment. In accordance to the WTO’s Earth Trade Statistical Evaluate 2020, the country’s share in global agricultural exports enhanced from 1.1% in 2000 to 2.2% in 2017, valued at $39 billion, but fell to 2.1% in 2019, valued at $37 billion. When the US witnessed a drop in its share of world agricultural exports from 13% in 2000 to 9.3% ($165 billion) in 2019, Brazil’s share greater from 2.8% to 5% ($89 billion), and that of China elevated from 3% to 4.6% ($82 billion). In order to catch up with Brazil and China, India wants to deliver about structural reforms in the agricultural sector, like a steady trade policy regime.
India’s agricultural exports experienced massive fluctuations for the duration of the 10-yr interval 2010-11 to 2019-20. The 10-year CAGR was 1.7%. Throughout the very first five many years, 2010-11 to 2014-15, agri-exports enhanced significantly from $24.4 billion (2010-11) to an all-time high of $43.1 billion (2013-14), before declining to $39.4 billion (2014-15), at a CAGR of 11.5%. The next five-yr time period (2015-16 to 2019-20) witnessed a slump in agri-exports to $33 billion (2015-16), in advance of a steady enhance to $38.8 billion (2018-19), adopted by a slide to $37 billion (2019-20). The CAGR all through this period of time slowed down noticeably to 3.7%, from the past time period (see graphics).
According to the Agricultural and Processed Foods Products and solutions Export Advancement Authority (APEDA), during April-October 2020, India’s exports of prime three agri-commodities, viz. basmati rice, non-basmati rice and buffalo meat, in phrases of price (in pounds) grew by 9%, 104.4% and 10.5%, respectively, compared to the corresponding period of the previous yr. The sharp increase in exports of non-basmati rice can be attributed to lower selling prices in contrast to that of key rice exporters, Thailand and Vietnam, and also because these countries stopped exports due to the lockdown. Using edge of this, Indian non-basmati rice exporters have been capable to fulfill the raising import requires from China, Bangladesh and African nations.
Even so, what is worrisome is the absence of a steady trade policy regime in India. In order to handle prices in the domestic market, the government has, at unique times, resorted to banning of exports of important agri-commodities, viz. rice, wheat, sugar and onion. Imposition of least export value (MEP) is yet another device normally made use of to tame inflation. These measures create uncertainty amongst importing nations, and deprive farmers of better returns from their develop.
The Agriculture Export Coverage (AEP), 2018, aims at attaining export concentrate on of $60 billion by 2022 and $100 billion in just a couple a long time, thereafter. This is indeed a humongous task, even less than ordinary circumstances, and far more so in the aftermath of Covid-19. Consequently, there needs to be a reasonable resetting of the timeline to achieve the concentrate on. This would involve a paradigm shift from a company-as-regular technique to a effectively-calibrated, detailed, strategic and end result-oriented agri-export plan and motion prepare. This would direct to tech-driven agricultural productivity gains throughout sub-sectors, ensuing in greater output and marketable surplus for domestic and foreign marketplaces.
The following tactics are proposed by this writer, for India to achieve the goal of $100 billion of agri-exports within just a affordable time-body, though also ensuing in doubling farmers’ profits:
-Bulk of India’s agri-exports are small price, uncooked or semi-processed items. As a result, the agri-export method ought to involve integration of worth-added agri-deliver with global value chains (GVC), by adopting best agricultural procedures involving productiveness gains and price competitiveness. It is really also critical for India to reconsider joining the RCEP at an opportune time, and to enter into FTAs with the EU, the US and the Uk.
-In order to raise exports of dairy items and make the dairy sector globally competitive, the central federal government wants to take into consideration enhancement of dairy export zones (DEZs) in collaboration with state governments (see ‘RCEP: A White Revolution for Exports’, FE, December 7, 2019 https://bit.ly/39fHMEo). This could immensely advantage tiny dairy farmers, organised as farmer producer organisations (FPOs)/farmer producer organizations (FPCs)/cooperatives, for giving milk, and also for contract generation of dairy products on behalf of big dairy producing providers, leading to expense performance and bigger export profits to dairy organizations as nicely as drastically greater profits to farmers.
-Linking of FPOs by way of deal farming preparations with export-oriented foodstuff processing models of food items parks developed below the Pradhan Mantri Kisan Sampada Yojana, for creating processed cereals, fruits, greens, fish and marine solutions, would enhance exports of processed food stuff and elevate income of tiny and marginal landholders and tiny fish farmers.
-With international trade in natural and organic items estimated to be about $90 billion, there is a massive option for exports of value-additional organic products and solutions from India, which exported $689 million truly worth of natural and organic foods in 2019-20. Madhya Pradesh, Rajasthan, Maharashtra, the North Jap Region (NER), Uttarakhand and Goa are main producers of natural and organic products and solutions. It’s attractive to generate Natural and organic Products Export Zones (OPEZs) in these states and the NER, with typical infrastructure for processing, standardisation, storage, logistics, and connectivity to ports and airports. Branding of products and solutions and registration as GI could additional facilitate exports of benefit-extra organic products and solutions. FPOs of natural farmers could be formed and connected to the OPEZs, to ensure larger earnings for farmers.
-Economic diplomacy and advertising of Model India can enjoy an efficient job in growing agri-exports.
-The AEP has advised the institution of Agriculture Export Zones (AEZs), to aid benefit addition of agri-commodities for raising exports in a WTO-appropriate method. In purchase to be certain higher revenue for farmers, FPOs need to have to be connected to AEZs to supply SPS-compliant agri-products.
-Greater investments in R&D and technological know-how, viz. the Online of Things, artificial intelligence and blockchain, for bettering agricultural productivity, useful resource-use effectiveness and export competitiveness.
-Linking farmers/FPOs to the export market place and skilling of surplus farmers for their absorption in agri-export worth chains could be an essential strategy to sustainably elevate farmers’ cash flow.
Concerted attempts by the central and state governments, Indian embassies, APEDA, EXIM Lender, NABARD, and all other stakeholders in the agri-export benefit chains are essential to deal with a whole vary of difficulties pertaining to marketing of agri-exports, which could most likely propel India into the prime bracket of agricultural exporters, and in the procedure facilitate doubling of farmers’ cash flow inside of a realistic time-body.
The author is an economist