Two years ago, in an article in a prominent newspaper, we had suggested numerous steps to increase the volume and value of agri-exports under the Agri Export Policy (AEP) 2018. The policy’s aim was to double agri-exports to USD60 billion by 2022. India garnered an additional USD8.4 billion — an increase of around 20% over the 2020-21 figure of USD41.8 billion — to achieve USD50.2 billion of agri-exports in 2021-22.
In the next phase, can India top up the figure with another USD9.8 billion to take agri-exports to USD60 billion by 2022-23? It’s a tough, but achievable, target for policymakers, farmers, processors, and exporters. If they succeed, it would be testimony to the country’s will and capability to harness the farm sector’s export potential and aim for USD100 billion by the end of this decade. To chart a blueprint on how that can be done, it is essential to take a look at the journey so far and the context in which India has notched up significant gains of late.
A bountiful market
Exports of USD50 billion represent a small part of India’s agriculture production and a fraction of the USD2 trillion global agricultural trade in 2021-22. Agriculture and related sectors such as forestry and fisheries account for 18.8% of the country’s GDP or equivalent of around USD500 billion in 2020-21.
The opportunity is to utilise the diversity in agricultural segments — foodgrains, horticulture, livestock, dairying, fisheries and forestry in their raw, processed, and value-added forms — to increase India’s share in global agriculture trade by 5%. Currently, the shares of agri-exports to domestic productions are 14.6% in spices and herbs; 15% in rice; and 25% in sugar, but negligible in organic products, fresh fruits and vegetables. There is a tremendous scope of enhancing production, processing, and value addition of India’s exportable farm produce.
What is India exporting?
Here is a snapshot of India’s key exports in 2021-22. Other products included tea, tobacco, fresh and processed fruits and vegetables, edible oil, oilseeds and oil meal, dairy products, alcoholic beverages, and Ayush and herbal products.
Agri-exports data for 2021-22 indicates a robust trend in export of cereals, spices, meat and cotton — items in which India has traditionally maintained a strong hold. India accounts for 50% of world’s rice exports, worth around USD9.6 billion. Non-basmati rice accounts for USD6.1 billion and basmati rice for USD3.5 billion.
The pandemic offered a great opportunity for African and Asian countries to source non-basmati rice at competitive prices. Domestic rice production kept pace at 127.9 million tonnes in 2021-22. Demand for Indian marine produce such as shrimp, fish, and fishery products peaked at USD7.7 billion, with exports to Japan, European Union, China, south-east Asia, and west Asia.
Meat exports, including buffalo, sheep, and goat, touched USD3.4 billion. India exported USD634 million worth of dairy products, too. The Pradhan Mantri Matsya Sampada Yojana, launched in May 2020 under the aegis of the Ministry of Fisheries, Animal Husbandry and Dairying, was a boost for exports.
A series of steps towards a turnaround
The Agri Export Policy 2018, coupled with targeted domestic production schemes, played a pivotal role in taking India’s agri-exports from USD33 billion in 2016-17 to USD50 billion in 2021-22. The following factors helped steer this turnaround:
An enabling policy regime
Trade strategies tailored for importing partners
Thrust on port infrastructure and logistics
Development of value-chain partnership
Seamless coordination with Indian missions abroad
Several processes to link India’s farms to forks in importing countries came into play, too.
#1. India used its digital and IT infrastructure to engage with officials; enable issue of statutory certificates online; and monitor custom clearance and movement of consignments. The digital network helped Indian missions abroad explore market opportunities; connect agricultural businesses with buyers abroad; and ensure smooth coordination to meet the increased global demand.
#2. Transport support in the form of reefer trains and roadways, and marketing assistance was provided to clear freight hurdles for land-locked states.
#3. Opportunities for small businesses and food processors have been created by focusing on clusters to provide direct export-market linkages and to encourage export-oriented production. Around 46 unique product-district clusters have been notified for export promotion. These include the Varanasi cluster for fresh fruits and vegetables; the Nagpur cluster for oranges; the Anantapur, Kolhapur, and Jalgaon cluster for bananas; the Sangli, Nashik, and Pune cluster for grapes; and the Solapur cluster for pomegranates.
#4. Efforts were made to expand India’s agri-export basket and promote export of products unique to India.
#5. Dedicated traceability systems such as HortiNet, BasmatiNet, and GrapeNet, catering to key export items were strengthened to ensure quality of exports and establish India as a reliable supplier. These systems also promoted transparency and accountability in the system.
#6. For the first time, the country smoothly harnessed a federal institutional mechanism by engaging states in formulating their respective agri-export policies and action plans to promote agricultural exports.
Unleashing agri-exports
Traditionally, India has had its niche in a few agricultural commodities such as basmati rice, the world’s first geographical indication (GI)-tagged aromatic rice. It recently added non-basmati rice to its agri-exports for buyers across Africa and Asia. In 2021-22, India cornered more than half of global rice trade, dominated by non-basmati rice. The country will intensify efforts to regain its position in basmati rice, which has shown a declining consumption trend in sourcing from India in recent years.
Similarly, India must support its meat-based industry, which has been a stronghold. Marine products have recently emerged as a biggest opportunity and this segment can be strengthened by adoption of quality-control measures. There is also scope to bolster infrastructure for export of value-added marine products.
Expanding the basket of notified spices from cardamom to major spices such as chilli, cumin, black pepper, and coriander can boost exports, which has been showing signs of saturation in the last two years.
With a growing basket of 120 GI food products, India must develop a mechanism to standardise and unlock the market potential for GI food products along with spices, herbs, and medicinal and aromatic plants.
The central government should make it a priority to scale up the clusters of organic products, fresh fruits and vegetables in collaboration with states. Requisite financial support should be available to establish processing, grading, and packaging units, and facilities should be provided to be classified for benefits under specialised agri-export zones.
Next year being the international year of millets, India must harness its rich variety of nutri-cereals and the potential to develop value-added products from them.
New initiatives, new beginnings
New initiatives on market access allow agri-businesses to expand their basket of exportable agricultural produce such as mangoes, pomegranates, and arils to the US; banana, sweet corn, and baby corn to Canada; processed food products to the UK; marine and meat products to China, Japan, and the US; and wheat to Egypt and other countries.
In addition, the continued bilateral engagement and exchanges on quality food production, compliances with the food safety standards of importing countries, massive schemes of certification and registration of food-safety laboratories along with market intelligence and trade surveillance involving Indian missions abroad are some of the ongoing efforts to pave the way for achieving the target of USD60 billion by 2022-23 as set in the AEP 2018.
Factoring in the impact of the pandemic into regular trade practice requires a systemic and targeted policy approach, launching of a comprehensive Agriculture Export Policy, time-bound approval mechanisms, robust infrastructure, and the strategic engagement of India’s diplomats at the World Trade Organisation to defend the country’s domestic support to smallholder farmers and consumers.
The latest rise in agri-exports is the beginning of a long journey for India, as it moves towards becoming a USD100 billion player in international agricultural and food trade.
Read More at https://economictimes.indiatimes.com/prime/economy-and-policy/infra-new-markets-and-farm-clusters-how-india-can-hit-usd100-billion-in-agri-exports-by-2030/primearticleshow/91472159.cms