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Indian Economy

Agriculture Export Policy, 2018

  • 17 Dec 2018
  • 7 min read

Last Updated: August 2022

For Prelims: Agriculture Export Policy, 2018, World Trade Organization, Minimum Support Price (MSP), Sanitary and Phytosanitary Measures.

For Mains: Agriculture Export Policy, 2018: Objectives, Elements of the Policy, WTO’s Role in the Policy, Benefits of Export Policy, Challenges regarding the Policy, Steps that need to be taken.

What is Agriculture Export Policy?

  • The Union Cabinet approved the agriculture export policy in 2018.

    • The Cabinet also approved the proposal for establishment of Monitoring Framework to oversee the implementation of Agriculture Export Policy.

  • The policy looks to provide impetus to agricultural exports, it is aimed at doubling the agricultural exports and integrating Indian farmers and agricultural products with the global value chains
  • It envisions making India global power in agriculture and raising farmers’ income through various policy instruments.

What are the Objectives of the Policy?

  • To double agricultural exports from 30 billion dollars to 60 billion by 2022.
  • To diversify export baskets, destinations and boost high value and value-added agricultural exports including focus on perishables.
  • It looks to promote novel, indigenous, organic, ethnic, traditional and non-traditional Agri product exports.
  • To provide an institutional mechanism for pursuing market access, tackling barriers and dealing with sanitary and phytosanitary issues.

What are Sanitary and Phytosanitary Measures?

  • With the establishment of the World Trade Organization on 1 January 1995, an agreement on the Application of Sanitary and Phytosanitary Measures (the "SPS Agreement") entered into force.
  • It concerns the application of food safety and animal and plant health regulations.
  • Countries can set their own standards, but they should be based on science and should be safe for the consumers.
  • To strive to double India’s share in world agri-exports by integrating with global value chain at the earliest.

What are the Elements of the Policy?

  • Agriculture Export Policy has been organised in two categories – Strategic and Operational
    • Strategic Includes:
      • Policy measures
      • Infrastructure and logistics support
      • Holistic approach to boost exports
      • Greater involvement of State Governments in agri exports
    • Operational Includes:
      • Focus on Clusters
      • Promoting value added exports
      • Marketing and promotion of “Brand India”
      • Attract private investments into production and processing
      • Establishment of strong quality regimen
      • Research & Development
      • Miscellaneous

What is WTO’s Role in the Policy?

  • All the measures proposed in the Agriculture Export Policy are compatible with World Trade Organisation norms.
  • With India moving out of the income bracket of per capital gross national income of less than $1000, it is not allowed by the WTO to give any financial assistance or export SOPs.
  • Therefore measures such as marketing and promotion and infrastructure building such as development of clusters are only considered in the policy.

What are the Benefits of Export Policy?

  • India to Become a Reliable Partner: India’s agricultural trade policies are inconsistent with respect to guaranteed availability of produce for exports which makes India an unreliable trading partner, the policy would help India become a reliable partner.
  • Foreign Exchange: It will help India in turning the unfavorable balance of payment as it will become an important source of foreign exchange.
  • Crop Diversification: It will act as a catalyst for crop diversification which helps in averting crop failure, better price realization etc.
  • Increase in Income: It will also result in social upliftment by increasing farm income.

What are the Challenges regarding the Policy?

  • Prices in international market for food grain, sugar, cooking oil as well as dairy and meat products are very low leaving Indian products at disadvantage from their global peer.
  • The current minimum support price (MSP) of wheat and rice make India’s food grain quite dear in the domestic market.
  • Indian government is always "pro-consumer", backing cheap imports to keep inflation in food prices low, hurting local producer.
  • Farmers are not aware of the external factors like global price, quality standards etc. which makes them a poor choice as reliable suppliers.
  • India’s farm produce suffers from poor customs and port infrastructure, and high logistics costs that cut into the exporters’ margins.

What can be the Way Forward?

  • Effective Infrastructure: Effective cold chains can increase the exports of processed agricultural products, but government needs to put in money to push infrastructure.
  • Need for Reforms: Limited state interference, reform of the Agricultural Produce Market Committee (APMC) Act, liberalization of land leasing norms etc. is required to make India a reliable supplier with continued stability.
  • Availability of Funds: The government should ensure easy credit flow to the export sector, especially small exporters, to ensure adequate availability of funds to them.
  • Formation of some Reliable Organisations: Trade promotion organisations can be setup at a strategic overseas location which can boost India’s paltry export to those nations.

UPSC Civil Services Examination, Previous Year’s Question (PYQs)

Prelims

Q. With reference to the circumstances in Indian agriculture, the concept of “Conservation Agriculture” assumes significance. Which of the following fall under the Conservation Agriculture? (2018)

  1. Avoiding the monoculture practices
  2. Adopting minimum tillage.
  3. Avoiding the cultivation of plantation crops
  4. Using crop residues to cover soil surface
  5. Adopting spatial and temporal crop sequencing/crop rotations

Select the correct answer using the code given below:

(a) 1, 3 and 4
(b) 2, 3, 4 and 5
(c) 2, 4 and 5
(d) 1, 2, 3 and 5

Ans: (c)

Mains

Q. How is science interwoven deeply with our lives? What are the striking changes in agriculture triggered off by science-based technologies? (2020)

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