Cabinet clears India’s first policy to boost farm exports
NEWDELHI: The Union Cabinet on Thursday cleared a new agriculture export policy aimed at doubling farm incomes by 2022, a target set by Prime Minister Narendra Modi, which in a large measure requires lucrative markets abroad for Indian farm produce.
Until now, India has had a five-yearly national foreign trade policy anchored by the commerce ministry, which also covered farm produce. The current foreign trade policy spans the years 2015-20. Thursday’s decision effectively sets in motion an agriculture-focused trade policy, which will be tailored to double agricultural exports from $30 billion at present to $60 billion by 2022. The longer-term goal is to take up the value of exported Indian farm produce to $100 billion.
The underlying objective of a trade policy devoted exclusively to agriculture is to have a “stable trade policy regime”, which means the country will now only minimally resort to trade-distorting restrictions on exports to control domestic inflation.
A key reason for the current politically challenging spell of poor returns to farmers has been a fall in farm exports, driven by factors such as low international demand and also India’s own
unpredictable trade policy.
For instance, India’s agricultural exports grew five times from about $8.7 billion in 2004-05 to $42.6 billion during 2013-14.
This, however, plunged to $33 billion in 2016-17. Such a fall has hit farmers hard.
According to calculations by farm economist Ashok Gulati, farmers received negative returns on moong, a type of pulse, to the tune of minus 7%. In jowar, a coarse cereal, there was a negative return of minus 18%, while in sesamum, it was minus
14%. Similarly, there were negative returns in sunflower (-13%), groundnut (-4 %) and urad, another type of pulse, (-4%).
“For the first time, the government has decided to frame an agriculture export policy. India luckily has the weather to produce a variety of food grains. There was a time when we used to import but now we export. But we did not have a policy in place. That’s why we have created a policy framework today,” Union minister Suresh Prabhu said, announcing the policy.