Cabinet clears India’s first policy to boost farm exports

A KEY REASON FOR THE CURRENT SPELL OF POOR RETURNS TO FARMERS HAS BEEN A FALL IN 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 f oreign 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-focussed 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.