Farm ex­port curbs: Min­istries fail to agree on ‘sen­si­tive’ items

The Hindu Business Line - - NEWS - AMITI SEN

Do­ing away with ex­port re­stric­tions on most farm prod­ucts — as pro­posed in the agri­cul­ture ex­port pol­icy ap­proved by the Union Cabi­net re­cently — has hit a hur­dle with many Min­istries and De­part­ments want­ing the re­stric­tions to con­tinue on items such as onion, sugar and tomato.

“The agri­cul­ture ex­port pol­icy sug­gested ban­ning ex­port re­stric­tions on all farm prod­ucts bar­ring a small list of sen­si­tive items nec­es­sary for food se­cu­rity. The idea was to keep the list very small. How­ever, in the in­ter-min­is­te­rial dis­cus­sions to iden­tify such items, there is a clam­our for con­tin­u­ing re­stric­tions on most items,” a govern­ment of­fi­cial told Busi­nessLine.

The pol­icy, an­nounced in De­cem­ber 2018, en­vis­ages dou­bling farm­ers’ in­come and agri­cul­ture ex­ports by 2022 through mea­sures such as cre­at­ing ad­e­quate in­fra­struc­ture and re­mov­ing ex­port re­stric­tions. In­dia’s farm ex­ports in 2018-19 are likely to be about $37 bil­lion com­pared with $30 bil­lion last year, as per govern­ment es­ti­mates. Ex­port re­stric­tions, Most Min­istries want items in their do­main la­belled ‘sen­si­tive’

in­clud­ing min­i­mum ex­port prices and tem­po­rary ex­port bans, are im­posed on farm prod­ucts from time to time by the govern­ment to shield do­mes­tic con­sumers from price in­creases. “But ex­port re­stric­tions also hit buy­ers and shake their con­fi­dence and hence the pol­icy pro­posed that they be done away with and only some es­sen­tial items be al­lowed to con­tinue with the mea­sures af­ter due in­ter­min­is­te­rial con­sul­ta­tions,” the of­fi­cial said.

To ar­rive at the list, a panel headed by the Com­merce Sec­re­tary and se­nior of­fi­cials from key Min­istries and bod­ies in­clud­ing the Agri­cul­ture Min­istry, Min­istry of Con­sumer Af­fairs, Food and Pub­lic Dis­tri­bu­tion and the Food Safety and Stan­dards Author­ity of In­dia was set up.“Those op­pos­ing the move say that if ex­ports are not re­stricted when do­mes­tic prices of com­modi­ties rise steeply, there would be a back­lash against the govern­ment even if those items are not es­sen­tial for sur­vival,” the of­fi­cial said.

Los­ing the mar­ket

The Com­merce Min­istry, how­ever, ar­gues that once an ex­port mar­ket is lost, it is dif­fi­cult to re­gain it as buy­ers may lose con­fi­dence and com­peti­tors may fill the space. There­fore, if farm­ers are getting a good price for their pro­duce through ex­ports and the farm item is not an es­sen­tial item mar­ket forces should be given free play.

“There is merit in both the ar­gu­ments. We have to take de­ci­sion-mak­ing to a level where a lot of due dili­gence and dis­cus­sion takes place. A com­mit­tee at a suf­fi­ciently high-level may have to de­cide on this. This will take some time,” the of­fi­cial said.

The pol­icy has al­ready done away with ex­port re­stric­tions on or­ganic and agro-pro­cessed prod­ucts but these items hardly ever faced any re­stric­tive mea­sures.

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