Agriculture Export Policy, 2018

Vision

Harness export potential of Indian agriculture, through suitable policy instruments, to make India global power in agriculture and raise farmers’ income.

With an aim to double farmers’ income by 2022, and to double agricultural exports by 2022, Government of India has recently come up with the Agriculture Export Policy, 2018.

The Cabinet has also approved the proposal for establishment of Monitoring Framework at Center with Ministry of Commerce as the nodal Department with representation from various Ministries/Departments and Agencies and representatives of concerned State Governments, to oversee the implementation of Agriculture Export Policy.

Objectives

• To double agricultural exports from present $ 30+ Billion to $ 60+ Billion by 2022 and reach $ 100 Billion in the next few years thereafter, with a stable trade policy regime.
• To diversify our export basket, destinations and boost high value and value added agricultural exports including focus on perishables.
• To promote novel, indigenous, organic, ethnic, traditional and non-traditional Agriculture products exports.
• To provide an institutional mechanism for pursuing market access, tackling barriers and deal with sanitary and phytosanitary issues.
• To strive to double India’s share in world agriculture exports by integrating with global value chain at the earliest.
• Enable farmers to get benefit of export opportunities in overseas market.

Current Agricultural Trade Scenario

• World agricultural trade has been relatively stagnant in the last five years (2013–2017) due mainly to fall in global prices.
• Due to effect of fall in global prices and back to back droughts during 2014–15 and 2015–16 India’s agricultural export dropped by 5% compound annual growth rate (CAGR).
• Indian agricultural exports grew at 9% compared to China (8%), Brazil (5.4%) and USA (5.1%) between 2007 and 2016. However, India’s agriculture exports are lower than countries like Thailand and Indonesia with much smaller agricultural land thus depicting a higher potential.
• While India occupies a leading position in global trade of agricultural products like rice, its total agricultural export basket accounts for little over 2% of world agriculture trade. • Also, India has remained at the lower end of the global agricultural export value chain given that majority of its exports are low value, raw or semi-processed and marketed in bulk.
• The share of India’s high value and value added agricultural produce in its agriculture export basket is less than 15% compared to 25% in US and 49% in China. India is unable to export its vast horticultural produce due to lack of uniformity in quality, standardization and its inability to curtail losses across the value chain. Elements of the Agriculture Export Policy Framework

Challenges in Policy Implementation

• Achieving an agriculture export target of $60 billion by 2022 looks ambitious, given the current global market conditions. More so, because India’s export basket largely comprises meat, marine products, and basmati rice whose demand in the world market is inelastic.
• India has a track record to open up imports whenever prices of crucial food items (potato, onion, pulses, etc.) start climbing. This hurts local producers. The Indian government is always “pro-consumer”, backing cheap imports to keep inflation in food prices low.
• There are several instances of sudden increase in export duties and lowering of import duties to keep food prices in check. The Centre cut the import duty on wheat by a fifth when prices increased in 2016–17, leading to imports from Australia and Ukraine flooding the market. Similarly, a zero import duty on palm oil hurts domestic oilseeds farmers.
• The current minimum support price (MSP) of wheat and rice make India foodgrain quite dear in the domestic market. In such cases, India cannot export it into the international market.
• A dispute at the World Trade Organization (WTO) can also not be ruled out. Already, the United States accuses India of subsidising farmers heavily to keep prices low.

Elements of the Agriculture Export Policy Framework

The policy recommendations are organized in two broad categories — strategic and operational.

Related News
UAE and Saudi Arabia had decided to use India as a base to address their food security concerns. In accordance with the Agriculture Export Policy, the farm-to-port project will be similar to a special economic zone but in the style of a corporatised farm, where crops would be grown keeping a specific market in mind.

Status: (Approved by Cabinet) http://pib.nic.in/newsite/PrintRelease.aspx?relid=186182