Liberal farm...

The policy talks about the need to standardise taxes in local markets for export-oriented produce. For instance, local market taxes vary widely for basmati rice, a key export commodity. It is 4% in Punjab and Haryana and 1.6% in Rajasthan. For pulses, the fees are 1% in Maharashtra and 2.5% in UP. “These are like implicit taxes on the farmer, although technically farm income is free from taxes,” the official said.

The policy talks of branding India’s farm products as “produce of India”, akin to the “Make in India” programme for the manufacturing sector. It proposes round-the-clock singlewindow clearance of perishables export items.

The government’s Doubling Farmers’ Income (Volume IV) plan states that India’s current farm exports policy “does not promote agricultural trade but is mainly used to control prices in the domestic market”.

A three-year ban on non-basmati rice exports during 2008-11 amid a rice glut had led to a “notional loss of $5.6 billion”, said the draft version of the new policy released earlier for consultation states.

Take for instance, the potato price crash of 2017. To rein in prices, the government had imposed a minimum export price on potatoes, put the commodity under the Essential Commodities Act and also allowed duty-free imports. This choked exports and caused domestic prices to crash amid a potato glut of 48 million tonnes.

Since there is a clear trend of a glut in several commodities and domestic prices are low, finding long-term export markets is key to improving farm incomes, said economist SR Sudhakar, a former professor of Tamil Nadu Agricultural University.

Sudhakar, however, said such a policy wouldn’t succeed without resolving more complex problems such as liberalised land-leasing laws and coordination with states, since agriculture lies in the domain of state governments.