Dr Parashram Patil
NMML Fellow, New Delhi.
Exporting is significantly important for the any given economy because it provides the opportunity to expand production, boost employment, reduce unit costs, and increase incomes. It also enables a country to better exploit its comparative advantage to generate higher incomes, which can pay for the investments in skills, capital, and technology to enhance competitiveness over time. In this large perspective being agricultural dominated economy the Indian government has been encouraging their agricultural exports to meet an ambitious target of $60 billion of exports by 2022 and thereafter to $100 billion. As Narendra Modi government has set out of ambitious target of $60 billion agriculture exports by 2022, in this context, if we evaluate agriculture export performance of FY 2020-21 which is $41.8 billion, these exports fall much short of the target of $60 billion. However, positively there is recording a growth of 18 per cent over the previous year. It has made impact on improved domestic farm prices at some extent. Now the challenge is how to maintain the present export growth.
In India’s total agricultural export baskets rice ranks first with 17.7 million tones valued at $8.8 billion, marine products ($6 billion), spices ($4 billion), bovine (buffalo) meat ($3.2 billion) and sugar ($2.8 billion), cashew kernels ($ 0.79 billion), groundnut ($ 0.73 billion), cereal preparations ($ 0.64 billion), tea and coffee ($1.5 billion), fresh fruits and vegetables ($1.4 billion), and cotton ($1 billion). Alone rice and sugar export alone contribute ($ 10.5 billion) in India’s total exports and in terms of percentage roughly contribute 26 per cent in the total value of agri-exports. This demand a thorough review of India’s agricultural exports basket because rice and sugar which is covering significant portion of our export and they are having environmental sustainability concerns which needs to be addressed.
Ashok Gulati and Ritika Juneja also given emphasis on re-examination of India’s agricultural exports to achieve sustainable agricultural export growth. There are huge subsidies available on rice and sugar exports, while other crops with huge export potential have been ignored. Farmers may be incentivised and rewarded to save water, switch from paddy and sugar to other less water intensive crops like pulses and oil seeds etc.
Time has come to offer incentives to the export of high-value agri-produce such as fruits and vegetables, spices, tea and coffee and cotton. Rice and sugar are high water intensive crops and it has been heavily subsidised through power for irrigation and fertilisers. Further, the export subsidy given by the government on sugar has led many other sugar-exporting countries like Australia, Brazil and Thailand to register a case against India at the WTO.
Ashok Gulati mention in his research that a kg of sugar has a virtual water intake of about 2,000 litres and for rice needs around 3,000 to 5,000 litres of water for irrigating a kg. In 2020-21, India exported 7.5 million tonnes of sugar and 17.7 million tonnes of rice. One could imagine amount of water we are exporting in the form sugar and rice export. Further rice cultivation generates ghg emission. Rice cultivation practices need to be changed with focusing on lower GHG emission such as alternate wetting drying (AWD), direct-seeded rice (DSR) and micro-irrigation.
Also, there is need to give very serious thought on to promote the cultivation of sugar beet, instead of sugarcane, to increase farmers’ income by reducing the cost of cultivation and increasing yield and it is less water intensive.
In the FY2013-14 agri-trade (exports plus imports) was 20 per cent of the agri-GDP as compared to 13.5 per cent by FY2020-21, it is indicating India is becoming less globally competitive in agricultural exports, in spite of the fact that the government of India is taking various initiatives to boost the agricultural exports. Therefore, we need to review current agri-trade policies and take measures to improves the agricultural export competitiveness.
As a majority of the country’s 1.37 billion population are dependent on agriculture for a living, the sector must attain self-reliance. A specific long-term strategy is needed with diversification of agricultural production and agricultural exports that factor in comparative advantages, available market, production, productivity, consumption, subsidies and incentives, conserving scarce resources of water and energy, and reducing the carbon footprint, promote better diversification of our agri-systems, lesser GHG emissions, investments in agri R&D, improve farming practices for minimising carbon emissions, minimise logistics costs, better infrastructure. Also need to focuses more on value-added processed food products rather than the primary processed agricultural commodities for exports.